It's a GOAL!

Last week The Wall St Journal had a great article “Making Kids Work on Goals (and not Just in Soccer).” While the article focused on the importance of goal setting skills and its link to higher grades, lower college-dropout rates and greater well-being in adulthood, I started to think about the link of goal setting in a successful allowance program.

The use of “S.M.A.R.T.” goal setting was used in the business world in the 1980s and now has made its way to the classroom. The acronym SMART stands for…setting Specific, Measurable, Attainable goals with clear Results in a set Time frame. You can apply SMART to financial goals and your allowance program.

Here’s how you can use the SMART concept to help your kids and teens set short and/or long term Savings goals:

• Specific – decide on what they want to save for (i.e. a special toy, new computer) and write it down
• Measurable – research the price of the item they want to save for
• Attainable goals – help them pick a reasonable item to save for (i.e. a lower end computer vs the top of line with mega screen)
• Results – show them how to do the math to determine how much to save from their allowance each pay period in order to buy the item and reach their goal (i.e. they will need to know the price and how long they plan to save for the item)
• Time frame - they should pick a reasonable time to be able to buy the item (i.e. teens can’t save to buy a car in a few months)

By using allowance to teach your kids and teens about goal setting, it just may spill over into other areas of their life – like school and sports. You will be helping to teach them financial responsibility, delayed gratification, and goal setting skills which are important traits of successful adults.