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Goal Setting for Kids (How to Explain Goals to a Child)

How to explain goals to a child, and then help them set one? I've got you covered with goal setting for kids' activities, definitions, and help.

I have two rules when goal setting for kids:

woman teacher giving high five to child at school, text overlay "ultimate guide to goal-setting for kids"
  1. The goal HAS to be something THEY want to be/do/have.
  2. The goal HAS to be a short-term goal for kids (we’ll get into why, plus how to deal with long-term goals).

But before we get into how you’re going to teach your child about goals and the fun goal-setting activities I’ve got for you, let me give you a kid-friendly goal definition to share with your kids.

What is a Kid-Friendly Goal Definition?

It’s not likely your child will know what a goal is – nobody does, right off the bat.

And if they do, they might just have an idea of it without really knowing all that’s involved.

Instead of giving you a goal definition for kids, I’m going to outline a goal-setting activity to do with your kids FIRST, and then give you the goal definition to give them SECOND (yes – the goal definition is coming, so keep reading!), when they’ll be in a position to understand it.

Doing this quick goal-setting activity will help them naturally discover what it means to set a goal.

Okay, okay – I’ll leave the goal definition for kids here (just promise you’ll read through the quick goal-setting activity below to see how well it ties in with this, okay?):

Goal Definition for Kids = A goal is something that you want to do, to be, or to have, and you don’t have the resources (time, money, permission, etc.) to get it right this moment. It is something you will work to get in the future, after you figure out what resources you need in order to get it/achieve it/do it.

Quick Goal-Setting Activity – How to Explain Goals to a Child

Let me show you the Now & Later quick goal-setting activity that will help your child clearly understand what a goal is.

Step #1: Ask them to write down a list of things that they want. These can be ALL the things they want to be, do, or have.

Step #2: Take another sheet of paper and divide it into three columns labeled “Now”, “Later”, and “Limits”. Ask them to separate the list into two columns – things they can be/do/have right now (“Now” column), and things that would take some time to be/do/have (“Later” column).

Now Examples: They could buy a pack of gum right now because they can go to the store with their lunch money and buy it. Or they could take a nap right now because, technically, they could just lay down and nap.

Later Examples: They can’t have a horse right now, because they don’t have the money to pay for it. Or because they don’t have the proper facilities set up for it, or because they don’t know how to care for one. They also can’t have a car right now, because they don’t have the money for it, they might not have their license yet, they haven’t looked into insurance, etc.

Step #3: Ask them what it would take for them to have the things in their “Later” column/or what is holding them back from getting the things in that column. Have them write down these limits/resources they’re in need of in a “Limits” column. For example, they could write down “more money, $1,000, a license, Mom’s permission”, etc.

Step #4: Tell them that the items in their “Now” column are not goals, because they can get them right now (or could reasonably get them right now). But the items in their “Later” column could be goals because they have to do the things that they wrote out in their “Limits” column FIRST, in order to get them. And doing those things will take time and other resources they don’t currently have.

Now that you’ve done this activity, you’ll want to share with them this goal definition for kids because they’ll probably understand it a lot more:

Goal Definition for Kids: A goal is something that you want to do, to be, or to have, and you don’t have the resources (time, money, permission, etc.) to get it right this moment. It is something you will work to get in the future, after you figure out what resources you need in order to get it/achieve it/do it.

See how much better that works? You can now point to your child’s own list, and tell them that they have a few goal ideas for what they could work towards, and they already know some of the resources they’ll need to work on in order to get what they want.

Now, before we dive into more goal-setting activities for kids, I want to explain something really important – you can anchor your child's entire money education with goal-setting for kids.

How Goal Setting for Kids and a Money Education Go Together

Money is a huge piece of the pie when teaching goal setting for kids.

Why? Because almost everything that they will ever set a goal for – career, personal, etc. – takes money.

Here’s the deal:

At some point in your own money journey, you figured out that most things in life – the things that YOU wanted – were going to cost money.

Money that someone else wasn’t going to pay for you, or that you didn’t want someone else to be responsible for because you wanted to do it on your own.

It could’ve been a trip you wanted to take. Or a bicycle you had to have. Or a video game. Or any number of things.

For me? It was to study abroad in Spain for a summer in high school. I wanted it desperately. I could taste the Tortilla Espanola, and – as an overworked farm girl – could barely imagine the luxury of taking a siesta each day.

I lived it. I breathed it. I dreamt about it.

And I earned money for it.

Not just once or twice, forgetting about the goal after realizing the amount of work it was going to take. But for 3 YEARS (that included things like mucking horse stalls and becoming the Chester County Dairy Princess to earn promotional money).

That’s why I’m focusing an entire page of my website on goal setting for kids, even though my primary focus is to educate kids about money.

Goal Setting and a Money Education go hand-in-hand.

So, where do we begin on this goal-setting + money journey for YOUR child?

Let me give you some great goal examples for kids.

Psst: you might also want to check out these short-term financial goals for high school students for ideas.

What are Some Example Goals for My Child?

Kids are really good at making wishes, or declaring what they want to be when they grow up.

Like, my 5-year-old could easily rattle off no less than 5 things he'd like right now (a Nerf gun, a remote-controlled army tank, and a Bakugan being at the top of it).

But there's quite a leap between having a wish and setting a goal.

That's why in this section, I'm going to offer real examples of wishes from actual kids (and how you can turn them into goals), as well as many other examples.

Here are some real wishes from actual kids, and how I've turned them into goals so that you can show some examples to your kids:

Buy an iPhoneSave up $200 for a used iPhone
Get a new bikeSave 50% of my allowance until I can buy the Dynacraft Magna Throttle Throttle Boys Bike
Buy a My Little Pony ToyUse 50% of my birthday money and 50% of my saved money to buy My Little Pony Retro Rainbow Collection

And here are tons of examples of goals kids and teens can choose from:

With all these great kid goal examples…let me help you how to help your child to choose the RIGHT goal for them.

How to Help Your Child Choose a Goal

Perhaps you’ve never actually asked your child what it is that they want to be/do/have (aside from snacks, cash, and rides to the movies).

I mean, you’re not alone in that. You’re going about your day, you’ve got a bazillion+ things to get done, and many days, you're just keeping things together (wait…I might be talking about myself here).

By the way, in case you haven't heard this today, yesterday, or for awhile: you’re doing great, Mama Bear.

But if you want goal setting for kids to go well, then you’ve got to dig deep with them and find out what it is that they want.

You might get some help with this by using one of these free vision worksheets for students (PDFs).

Or, find a time to chat with them.

Tonight, over dinner, tomorrow in the car ride to school, or in the evening when the television is normally on, use this goal conversation starter to do some digging into what they truly want and would be willing to work towards:

Mama Bear: Hey [Kiddo’s first Name]! Have you ever had something that you wanted to do? To Be? To Have? I mean, outside of what we provide for you. Something that you can work on getting yourself?

Kiddo: Kiddo either answers with something that’s been immediately on their mind, or, more likely, blankly stares back at you for a few awkward seconds.

Mama Bear: Prod them on a bit with questions like, “it could be a new toy that you’ve been wanting, or something that you want to take a class for outside of school, or new equipment to play with, or [XXX].” Be careful here with your suggestions, as it’s not likely your child is ready to flex their delayed gratification muscles while goal setting for kids and dive into a longer-term savings goal. It’s best to start with something they can reach within a few weeks or months.

Kiddo: Kiddo gives you an idea. Latch onto it.

Mama Bear: “Great! Now, do you know how you would actually be able to do/be/have the specific thing that you want? Besides asking your parent(s) for it?”

Kiddo: Kiddo either does or does not know that money is how things are purchased, and that saving up money is how you buy more expensive items.

Mama Bear: “It’s by saving your money for it. I’m so excited that you have a goal for something that you want to do/be/have, that I’m going to help talk you through how to save money and reach that goal. How does that sound?”

Teach Your Child to Set SMART (ER) Goals for Kids

Hopefully, from the two exercises above, your kiddo has an idea of what they want to set a goal for. But declaring what you want is not actually setting a goal.

It's just the first (important) step.

How do you actually teach your child to set goals, let alone help them to reach those goals?

In this section, we'll go over how to take what your child wants to be/do/have, and turn it into an actual goal.

What is a SMART (ER) Goal?

You've likely heard of SMART goals. And if you haven't? Well, you're in the right place.

SMART stands for a goal that's: specific, measurable, achievable, relevant, and time-bound.

But I like to take this a step further for kids. I like for them to set SMART (ER) goals.

These are goals that are:

LetterWhat it Stands forWhat it means for Kids
S SpecificSomething that they want to be/do/have that is specific enough that they'll know when they reach it.
M MeasurableMeasurable by some number so they'll know how to track it (money amount, percentage, etc.)
A AchievableSomething they're likely to be able to achieve (if they put in time and energy to it)
R RelevantRelevant to their lives, or something that will make their life better in some way
T Time-BoundHas a deadline to it
E EnergizingEnergizes them enough so that they'll want to work on it
R RewardedFilled with mini-milestone rewards to keep their motivation going

You can read lots more about SMART goals for kids in my articles:

Next up? How to actually help guide your child to reach their goal.

How Do I Help My Child REACH Their Goal?

Kids have zero experience getting to the juicy, fulfilling side of actually achieving a goal.

This means that they probably have less motivation to actually set a goal – I mean, who would want to set a goal and work towards something (i.e. delay their gratification) that they think they’ll never get?

This is why teaching a child to set goals is different from teaching an adult to set goals (even though the outcomes and a lot of the terms and such are the same).

Here are the various roles that you need to fulfill in order to help them through the goal-setting process.

Role #1: Help them filter down their goal to the ONE goal that they can achieve most quickly

This is critical. You want to start them at the shortest-term goal possible because you want them to get to the other side of what it is that they want to be/do/have, and then come back to the goal-setting line again and again. By repeating the goal-setting process, your kids will really learn how to do it.

I’ve picked out a bunch of free goal-setting worksheets for kids (pdf), and teenage goal-setting worksheets that will help them with this process.

And my personal goal-setting worksheet for kids will help them to filter down all their wants/needs into the best goal for them to do right now.

It all starts with helping them choose a quick-win savings goal.

​Still, what if your child insists on keeping two goals, three goals, or five goals instead of just focusing on one? Check out the section on “fun activities to teach goal setting” for an idea of how to deal with this.

And what if your child insists on keeping a pie-in-the-sky goal that will take them eons to reach (if they ever do), no matter what kind of sense you try to talk into them? Then you’ll want to set up milestones on a cookie-crumb trail of rewards with them – more about this in Role #3.

Role #2: Help them find a Money Source

Just about every goal takes some form of money to get – and your child is, well, a child. They don’t have a full-time job, and they might not even have great job prospects (especially if they don’t drive).

SO, one of the most critical roles for you during this process is to be the source of money for them or to help them source money for them to put toward their goal.

Now, by “BE” the source for them, I don’t mean handing over the money they need. But I do mean getting your allowance system (whatever that might look like) in check so that they can count on consistent money getting into their hands.

Hint: You'll want to make sure the goal they choose will take more than one allowance cycle to purchase — otherwise, it's not really a goal, as they will be able to have it right away.

Role #3: Keep them Going

Setting a goal and actually seeing it through are two different things.

I don’t need to tell you how many goals have died a slow or fast death.

So, one of your most critical roles is to keep them motivated enough to keep going with their goal. In order to do this, you’ll want to:

  • Set Up a Cookie Crumb Trail of Rewards: I like to teach this to adults and kids alike. When you set up a goal (especially one that will take longer than a few allowance cycles to achieve), you want to set up a cookie-crumb trail of rewards that they get to follow as they reach certain milestones. When they save their first $5 towards the goal, they get X reward. When they are halfway there, they get X reward. This does not have to be a monetary reward — which would take away from what they're trying to save up for anyway. It could be something like a slumber party with friends at your house.
  • Help them Reinvest in the Goal After they Lose Interest: When your child loses interest in reaching their goal? You can help them WANT to reinvest in it. Here are three ways to help jump-start their goal again, after they’ve lost interest in it.

Fun Activities to Teach Goal-Setting

I’ve got a few fun activities to teach goal setting and help your kids/students work towards the goals they actually set.

1. Play a Round or Two of Goal Target Practice

Have your child brainstorm 7-10 action steps they can take (small ones) to get them closer to their goal.

Then, fill in one action step into each ring of a bullseye.

Each week, have them throw a dart (a real one, or not if you're against the whole sharp-objects-thing) to the bullseye, and whichever ring they land on, they have to work on.

For example, if I were guiding my own child through their goal of getting a new bike, then I would fill in rings such as:

  • find one way to make an extra $5
  • put 50% of your allowance money this week/month into your savings account/piggy bank for your goal
  • research one way you could get what you are saving up for cheaper so that you can get it faster
  • etc.

2. Play a Round of Building

This is an especially helpful lesson for kids who want to go after more than one goal at a time (*cough, cough* this would be a good visual lesson for adults, too!).

Set up a building contest.

You can use Legos, ice-cream sundaes with multiple building ingredients (so, the ice cream, sprinkles, chocolate syrup, cherry, nuts, etc.), or really anything that needs to be built in some way.

Have one group of kids or one child work on building ONE of the items, and the other child/group has to build three of whatever it is, at the same time. The first group to build it to completion gets a sweet reward.

When the group/kid working on just one wins, explain to everyone that this is why you should only go after one goal at a time – you’ll get there faster when you dedicate all your current resources to just one goal rather than spreading your resources thin and attempting to achieve all three at the same time.

3. Play the Now ‘N Later Goal Setting Game

As mentioned above, you can play a round of Now ‘n Later goal setting, which will show your kiddo what a goal is, plus reveal some of their own they can choose from.

Bonus: Why Goal Setting for Kids Makes Them Care about the Value of Money

Your child is now going to be ACUTELY aware of money – after all, the more they can get of it, the more they’ll have to funnel towards their goal.

This is a great thing!

You can use this goal and their new eagerness to save up for it as a way to teach the value of money.

These money lessons, taught through goal making, will work for just about any age (ever try to navigate what’s considered “age appropriate” with money? We’re bypassing that for now, because every child has a goal — whether they know it yet, or not).

Some examples of the money lessons that could play out:

  • Wasting Money on Toys that Will Break Easily: If you want to teach a child to not waste their allowance on another toy they’ll just stop playing with next week, then you can get out your calculator and keep a tally of how much money they could have instead towards their goal if they hadn't bought each of the toys they lose interest in over a few months' time. They might start to make better choices once they see the numbers (or maybe not, but either way, you have to try to see what works).
  • Finding Money Crumpled Up in the Corner of their Room: Yes, I have had parents tell me that they find money crumpled up in the corner of their kid’s room. This is money you can tell them can go into their piggy bank or savings account towards their goal, and is wasting away when it’s on the ground.
  • Sticking to a Savings Goal for More than a Week: Once they get the sweet taste of victory – by actually saving up for a small goal that they reach – their confidence will be boosted to the point where they’ll feel like they can save money beyond a week because it’ll be WORTH it.

Working with their goal — whether it’s to buy a new Cabbage Patch Doll, or to get to college — is a perfect avenue to teach them about money.

Sooo…what happens when your kid fails at their savings goal?

What to Do When Your Kid Fails to Achieve their Savings Goal

So, your kiddo has declared a savings goal they’re going to save up for…and gave up on it after only a week (again)?

It happens.

Heck, it even happens to adults (anyone notice the difference in gym traffic on February 1st versus January 1st? Same concept).

Right out the gate, goal setting for kids is exciting. Maybe it’s thrilling, slightly intimidating, but makes you feel important enough to announce it to everyone.

Then when the going gets tough – your kiddo sees something else they’d like, or they stop believing they’ll ever actually reach the more expensive goal and so opt for the instant gratification purchase instead – the goal just kind of fades away.

Let’s discuss strategies for getting your child to re-kickstart that savings goal of theirs, even after they’ve lost interest and moved on to the next thing (a really important step in the goal setting for kids' arena).

Jump Starter #1: Have the “People Make it on the Second-Go-Round” Talk

Chances are, if you point out the fact that your child has given up on their savings goal so soon, it’ll probably make them a bit bummed (if they’re not kicking themselves about it already).

SO, now’s the PERFECT time to introduce a pep-talk with concrete examples of really popular inventions/events/goal-setting that the original person had failed to create on their first try, which we all take for granted today.

A few come to mind for me:

  • Walt Disney: The man behind Mickey Mouse was actually fired from a newspaper once because he was thought to not have enough imagination and not enough good ideas. Go figure? Thank goodness that he kept going, as we would have all missed out on Disney World, The Little Mermaid (my personal favorite), and all things cartoons.
  • J.K. Rowling: Her goal was to get her Harry Potter series of books published. And yet, she was rejected by 12 different publishers first.
  • Jim Carrey: He knew he wanted to be a comedian before 10. At 15, he took the stage for his first routine ever…and completely bombed it. But he kept going!

Jump Starter #2: Break the Original Goal Down into Pre-Chosen Rewards

Goal setting for kids 101: Your child has got to BELIEVE that they can actually reach their savings goal. Otherwise? Well…they’ll give up again.

Adults do it all the time when setting a goal! Like…:

  • I can’t actually save up for a trip to Paris, so instead I’ll use the money I have saved up for a beach weekend getaway.
  • Paying off all our debt is impossible to do, so instead of throwing any extra money towards it, I’ll let it get eaten by our checking account gremlin.
  • I feel really crummy about not getting what I really want, so I’ll spend $9.42 on my Starbucks order.

This go-round, helps them break the goal down into tinier chunks with rewards at the end of each.

It’s like building a personal board game of rewards!

So, for example: a purchase goal that will take $52 can be broken down into three $17 chunks. Each time your child achieves a $17 increase in their savings, they can reward themselves – with your blessing – by:

  • Having a friend's sleepover.
  • Getting to choose what’s for dinner (Mama’s homemade cooking!).
  • Getting to choose the movie for family movie night.

Jump Starter #3: Introduce a “Surprise” Money Incentive

This time ‘round when goal setting for kids, keep them motivated for longer by introducing a surprise money incentive from the Bank of Mom & Dad.

Choose a random week (perhaps when they seem a little eager to give up…like week 2), and tell them that all money that hits their savings account for their goal by Friday is going to be doubled by you guys!

Goal setting for kids is really about stretching and growing their instant gratification muscles. And it's hard to do. You've now got 3 smart strategies for getting your child to follow through with their goals. Which are you most excited to try?

Where to Go from Here with Your Kid(dos) Money Education

So, your kid now has a goal, and they’re saving money towards it. Amazing! That’s literally the best, smallest action step you could take in helping them to start to understand the world of goal setting, with the side benefit of them learning about money.

Literally, any money conversation you have with them stemming from whatever questions they throw your way, you can tie back to this one goal.

I’ve got a few resources for you to continue the conversations, and give you a little guidance with things:

  • Get Clear on What You Want: Instead of getting bogged down with how to teach kids about money, answer these questions and come up with a Money Mission Statement for your child of WHAT you want to teach them about money. It’s the first step!
  • Make Learning about Money Fun: Come on over and grab your FREE Dessert Breakout Box printable that will have kids not only begging to sit down to dinner tonight but also working through a few money puzzles to up their knowledge about how to save money.
  • Keep the Conversation Going: If nothing else, then print out these 50-money conversation starters for kids and have some FUN around answering some silly + interesting money “what ifs.”

Remember, as money conversations and questions start to trickle out of your kiddo’s mouth – now that you’ve opened their eyes to the role money plays in life – you can always tie it back to the current goal they’re saving for.

Makes the whole process less intimidating, right?

I hope I've given you some seriously helpful information when goal setting for kids for the first, fifth, or 50th time.

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Amanda L. Grossman is a writer and Certified Financial Education Instructor, a 2017 Plutus Foundation Grant Recipient, and founder of Money Prodigy. Her money work has been featured on Experian, GoBankingRates, PT Money,, Rockstar Finance, the Houston Chronicle, and Colonial Life. Amanda is the founder and CEO of Frugal Confessions, LLC. Read more here or on LinkedIn.