Should Your Kids Contribute to Family Money Goals?
Many years ago, I remember watching an episode of Wife Swap, a reality television program where "two wives, from two very different families, swap lives for two weeks." The episode starred Tulsa, Oklahoma mom, Amy King, who made her three children buy their own treats and contribute toward all family vacations.
Initially I thought the idea of making your children pay for their own vacation was a little radical and unloving. Obviously you don't want to force your eight-year-old to give up all of their allowance to your home renovation project or make your teenager stay home if they don't contribute to the family vacation fund.
But it got me thinking. Could there be some good in asking children to contribute financially to family goals?
Why Set Family Financial Goals?
Setting and striving toward a goal as a family can be a powerful thing. It can bring every member of your family together and can help you work together and keep each other accountable. Spark Parenting says, "Once kids see firsthand how to set and achieve family goals, they'll better understand what it takes to set and accomplish personal goals."
Some important goals to set for your family can include:
- Spending more time together;
- Reading 10 books together;
- Getting healthy together;
- Giving back to the community.
All of those goals are great to pursue as a family, but I encourage you to take on a financial family goal, too, especially when it feels like your budget is too tight for fun or travel. If you have been wanting to take a family vacation for years, yet never have enough money left over after bills, then setting a family financial goal can help.
Make It About the Family
When it comes to setting financial goals, set ones that involve and please the whole family. Yes, your family might be in debt or need new tires on the family van, but these scenarios should not be the responsibility of your children.
Instead, make the financial goal something your kids want and can dream about with you. Here are some ideas for things to save up for:
- A family vacation in another country;
- A special dinner out;
- A day at a theme park;
- A family game/toy/activity (i.e. basketball hoop or bikes);
- Movies and ice cream.
Your family financial goal can be big, such as a $5,000 vacation in Italy, or it can be small, like $30 for movies and ice cream. You can even have a mix of small and large goals. You should allow some room for your kids to daydream and plan. Don't just throw out "Hey, kids, we need to visit grandma in Florida next year, start saving," and expect your kids to donate willingly.
How Much Should a Child Contribute?
Once the family has decided on a financial goal they want to accomplish, figure out a deadline and how much needs to be contributed each week and month. For example, a day trip to Disneyland for my family would cost around $450. If we wanted to go in 10 months, then we would need to save $45 toward our goal each month. We would then break down how much everyone would contribute weekly or monthly, depending on how often you pay allowances.
If you assign chores and allowances based on age, then it is easy to assign how much each child should give toward the goal. Ideally, children's allowances should be split 50% — 60% spend/free choice, 20% — 30% save, and 10% give. This is true even if you do not do family allowances. If your child earns $10 a month for chores, you want to instill in him that he can keep $5 to $6 of it to do what he likes (depending on saving goals), $2 to $3 should go automatically into the savings account and not touched, and $1 should go toward charitable giving.
For family financial goal contributions, 10% should be required of all children. I recommend the 10% coming out of the "spend" category, so that the child's allowance is broken down like so:
- 50%–60% free choice
- 20% savings
- 10% family financial goal contribution
- 10% charitable giving
Obviously, your child is not going to be able to afford Disneyland anytime soon with a $1 contribution per month. That is where your contribution comes in. You fill in the gap, so it is important to make this a priority in your budget.
So if my two children make $20 a month each from chores, I would expect them each to pay $2 toward the Disneyland fund. Which means my husband and I would then be responsible for $20.50 each per month.
What If Kids Don't Want to Give?
I definitely don't recommend making family goal time a negative thing with consequences and punishments. Instead, I recommend making a chart and setting the rule that parents only contribute on the weeks or months the kids contribute. So if my kids both spent their whole allowance on something else, then they wouldn't be in trouble, but I would show them that mom and dad will not be contributing this week and that our trip to Disneyland is now postponed a month.
Making a large chart to track progress is a huge motivator for everyone. I encourage you to set and treat fun, family financial goals as a family matter. Everyone is doing their part. Of course, some kids might be against the idea, and for those issues, I believe you just need to sit down with them one-on-one and get to core of the problem. For example, maybe Johnny isn't contributing willingly to the fund because he doesn't want to go to Disneyland or because he is mad at his brother.
Making your children contribute to family financial goals is for their benefit, not yours. This isn't the ultimate plan to get your child to start pulling their weight. Instead, it is a practical exercise that helps children understand the value of working together as a family, and how to save to make their own financial dreams come true.
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