All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.
The charity yielding the greatest reward is that which one spends on wife and children. The evidence on this is that Abu Hurairah (May Allah be pleased with him) reported: Messenger of Allah (PBUH) said: "A dinar you spend in Allah's way, or to free a slave, or as a charity you give to a needy person, or to support your family, the one yielding the greatest reward is that which you spend on your family." [Related by Muslim].
In addition, Thauban reported Allah's Messenger (PBUH) as saying: "The most excellent dinar is one that a person spends on his family, and the dinar which he spends on his animal in Allah's Path, and the dinar he spends on his companions in Allah's Path." Abu Qilaba (one of the narrators) said: He (the narrator) started with family, and then Abu Qilaba said: Who is the person with greater reward than a person who spends on young members of his family (and thus) preserves (saves them from want) (and by virtue of which) Allah brings profit for them and makes them rich." {Related by Muslim}.
Commenting on this Hadith, An-Nawawi said: "It urges spending on family and indicates that this act of charity is the one yielding the greatest reward. A person is obliged to spend on members of his family while it is commendable for him to spend on his relatives for it is both a charity and observance of kinship ties. He is also obliged to spend on his wife. A person is rewarded for spending on the afore-categories and his reward is greater than that of giving voluntary charity, and this is why the Prophet (PBUH) said: " the one yielding the greatest reward is that which you spend on your family" although before that he mentioned "A dinar you spend in Allah's way, or to free a slave, or as a charity you give to a needy person". He (PBUH) gave precedence to spending on one`s family compared to spending on the other categories. This is even confirmed by the Hadith in which he (PBUH) said: " This sin is enough for a man that he withholds the subsistence from one whose master he is." {Sahih Muslim in Shareh An-Nawawi vol.3/pp.435}.
However, one should spend on his family hoping for Allah`s reward and intending to save them from want, and by virtue of this Allah brings profit for them and makes them rich. This way they can devote themselves for offering acts of obedience, running their daily life affairs, and traveling through the earth (Ar-Rum, 9).
"The Prophet (PBUH) said: "If a man spends on his family (with the intention of having a reward from Allah) sincerely for Allah's sake then it is a (kind of) alms-giving in reward for him." Commenting on this Hadith, which is reported by Al-Bukhari, Ibn Rajab (May Allah have mercy on him) said: "He is rewarded from Allah if he spends on his family for Allah`s sake. This is also indicated in the following Hadith: Narrated Sa'd bin Abi Waqqas: Allah's Messenger (PBUH) said: "You will be rewarded for whatever you spend for Allah's sake even if it were a morsel which you put in your wife's mouth." {Sahih Bukhari & Muslim}." {Jami` al-ulum WalHikam, vol.2/pp.63}. And Allah The Almighty Knows Best.