“You want that new My Wacky Unicorn game?”
“Yes!” She says, smiling.
“Do you have the $15.95 to pay for it?”
“No.” Her lips begin to quiver as her eyes narrow.
Let me guess: You’ve been in a situation like this one before. And it didn’t end well – perhaps in tears or even a tantrum.
But it doesn’t have to be this way every time as long as you know how to proceed.
“Ok. Let’s set a SMART goal when we get home.”
I love it when kids learn a money-smart skill that becomes an invaluable life-smart skill. Goal-setting is one of those skills, and, in particular, setting SMART goals.
A SMART goal is:
Attainable (or Achievable)
The SMART framework is ingenious because the acronym itself, without the broken-out explanation, is instructive. We should, of course, want our goals to be smart.
In addition, the word “smart” is meaningful in your Art of Allowance system because you already set up a SPEND SMART jar when you created your three-jar allowance.
The simplicity of this SMART (and smart) framework means we can initiate it with our kids from a young age — as young as four or five. This is another example of introducing them to the language of money (explained further in this post).
So how does a SMART goal work in practice?
Let’s return to our example dialogue. Pretend you’ve just had that conversation with your daughter, and you explained that the two of you can set a SMART goal when you get home.
If you’ve just started an allowance, then she probably won’t be thrilled with this idea the first time it’s mentioned. Her quivering lips might gain momentum, and she could still erupt into a full-scale tantrum.
Remember, money empowerment is a journey. So stick to your guns and head home, ready to start SMART!
When you get back, pull out a piece of paper that your daughter can tape to her Save jar. Next, draw or print a picture of the item she wants.
Now you’re ready to make this goal SMART!
Her goal is already specific. She wants a My Wacky Unicorn playset.
You make it measurable by calculating the amount of money she needs to save and the time it will take to reach her goal.
“You need to save $17.45. (Don’t forget about tax!) If you put $3.00 into your Save jar each week, then how long will that take?”
(NOTE: Depending on her age, she might need help with math, particularly division.)
You work out with her that it will take eight weeks. And yes, if you’re paying attention, we got a little ahead of our SMART selves by making the goal time-based!
Write that time on your daughter’s Save jar. Now you have a reference point every week when you give her her allowance. You can remind her of her goal and even suggest that she could enjoy My Wacky Unicorn sooner by putting more of her money into her Save jar each week.
Also, you’ll want to make sure your daughter’s first goal is attainable.
A five-year-old probably shouldn’t be saving for a new phone because, well, she’s five! Also, she’ll almost certainly lose focus on a goal with such a long time horizon. She might get frustrated, turning her off the idea of goal setting in general. I recommend that a first goal be in the low double digits or something she can attain within less than eight weeks.
Naturally, your daughter’s goal will be relevant. She wants the playset.
Voilà! In eight weeks, she will have earned her SMART goal-setter badge!
And guess what? We’ve made it easy for you to do all this with our handy-dandy SMART goal generator.
Even if your daughter doesn’t explicitly set goals in such a systematic way going forward, you’ve provided her with a framework for thinking about them that can carry over to other facets of her life.
I want to thank Erin Prim and fellow Fosterati Chris Angelis and Christine Cauthen for their help bringing clarity to this essay.