As a parent, you are the most significant influence on your children’s financial habits, now and later in life. Teaching money skills now will set them up for success in the future.

Teaching your children about finances is not as complicated as it may initially seem. In fact, it’s something you can do every day. You can turn your day-to-day activities into teachable moments for your family. Like, use trips to the grocery store or ATM as opportunities to teach valuable money lessons. Being open about topics like spending money, the importance of saving, and needs vs. wants will help cultivate good financial habits.

If improving your family’s financial awareness is one of your goals this year, we’ve got you covered! Use the following tips to help teach your children valuable money management lessons.

Kids Ages 2 – 5

Although children at this age won’t fully understand the concept of money, it’s never too early to begin teaching basic lessons. Here are some easy ways to get started:

  • Play grocery store or restaurant to introduce the basic concept of exchanging goods/services for money.
  • Teach them the names of different coins and bills and let them handle the money.
  • Discuss the differences between wants vs. needs. For example, needing groceries to make dinner vs. wanting candy at the checkout line.
  • Provide them with a piggy bank or savings jar. Young children are visual learners, and this is an excellent way for them to see how saving works.

Kids Ages 6 – 9

As your children begin to learn basic math, use these skills to enhance their knowledge of money.

  • Compare prices when you’re at the grocery store or looking at a restaurant menu.
  • Create a budget for a trip to the grocery store. Then, let them help you decide what to get to stay within budget. Incorporate coupons to show ways to save money and have your child look for those products in the store.
  • If your child earns an allowance, begin teaching them to save a portion of their money toward future goals.
  • If there is a toy or game that they want, create a savings chart to help them visualize how saving money will help them achieve their goal.

Kids Ages 10 – 12

This age is the perfect time to begin introducing your child to banking. Let them make some of their own financial choices with your supervision.

  • Begin making regular deposits with them into their account. Or, deposit it for them and show them the receipt. This helps them see how their balance is growing.
  • Include your children in conversations about lunch money and shopping for school supplies. Test their skills by giving them a budget and list. Then, let them shop for specific items within the store.
  • Your kids might start earning an allowance for doing chores around the house or for helping neighbors. Encourage them to deposit some of their earnings into their savings account.

Kids Ages 13 – 15

As your child progresses through middle and early high school, they’ll be introduced to more advanced money concepts. Use these opportunities to enhance your kid’s money management skills.

  • Begin discussing the idea of a debit card and how it works.
  • Talk about an emergency fund. Having money set aside for unexpected expenses (or activities with friends) is important.
  • Since they will start learning to drive soon, talk to your kids about cars. Look at vehicle prices, compare new vs. used, discuss maintenance costs, etc.

Kids Ages 16 – 17

Your child is now at the age where money is likely part of their everyday life. They are driving, possibly beginning their first job, and spending more time being independent. All these events provide opportunities to teach valuable money management skills.

  • Review their paystub if they have a job. Discuss earnings, taxes, and the importance of saving.
  • If your child is driving regularly, they may ask about getting their first car. Take them with you to look at vehicles and compare prices for different features. This is an excellent opportunity to review needs vs. wants!
  • Work with your child to create a basic budget or way to track their expenses.

Kids Ages 18 & Up

Although your child is now legally an adult, there is still a lot of financial wisdom for you to share. There are many milestones they will achieve soon, and you want to ensure they are ready.

  • Once they turn 18, your young adult can open their first credit card. While many parents are worried about this step, it’s an excellent opportunity to teach them real-life money management skills. Plus, it allows you to introduce the concept of credit reports and scores.
  • If your young adult is heading to college, involve them in discussions about tuition, financial aid, meal plans, books and supplies, and other costs. Work on creating a budget for their college life and test drive it in the months before they head to school.
  • If your young adult is starting a full-time job, encourage them to contribute around 15% of their income to savings. They can set up automatic transfers to make it easier.
  • Discuss the differences between gross (before taxes) and net (take-home pay) income.
  • Encourage them to start saving for retirement through their employer-provided 401(k) or set up an Individual Retirement Account (IRA).
  • As they start saving for their first apartment or home, look at prices. This helps them to be realistic about housing costs.
  • Be transparent with your young adult about your mortgage or rent costs, utilities, and other things they need to consider. Remind them that their total housing costs should only be around 30% of their income.

We’re Here to Help with Teaching Money Skills!

Whether you realize it or not, your children are always watching you. So, you want to be a good example of managing money. While kids grow up fast, incorporate everyday events into teachable moments to help them become savvy financial adults.

If you want to open a savings or checking account for your child or have questions about teaching money management skills, we’re ready to help. Call, chat, text, or stop in! Our team is available Monday-Friday 9am-4pm ET – (315) 671-4000.

Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.