As a parent, you are the most significant influence on your children’s financial habits, now and later in life. Providing a good example and helping them set healthy money habits 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. Use trips to the grocery store or ATM as opportunities to help them learn valuable money lessons. Being open about topics like spending money, the importance of saving, and needs vs. wants will help cultivate savvy 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:

• Incorporate opportunities like pretending to play grocery store or restaurant to introduce the basic concept of exchanging goods for money.
• Teach them the names of different coins and bills and let them handle money.
• Discuss the differences between wants vs. needs. For example, needing groceries to make dinner vs. wanting candy at the checkout line.
• Introduce the concept of saving money by providing 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 progress through early school and learn basic arithmetic, use these skills to enhance their knowledge of money.

• Introduce the concept of comparing prices when at the grocery store or looking at a restaurant menu.
• Create a budget for a trip to the grocery store and 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 that they have their eyes on, 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 and letting them make some of their own financial choices.

• Bring your child to the credit union to open their first savings account. Explain how banking works and begin making regular deposits with them into their account – both at the branch and digitally.
• 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 money for performing 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 stocks and other advanced investment opportunities. You can make it a family activity and let everyone choose a stock as “theirs.” Then, monitor the stocks and discuss how everyone’s choices fluctuate and perform overall.
• Introduce the concept of an emergency fund and how having money set aside for unexpected expenses (or impromptu 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 jobs, and spending more time being independent. All these events provide opportunities to teach valuable money management skills.

• If your child works a part-time job, review their paystub with them. Discuss earnings, taxes being taken out, and the importance of saving. You can also enroll them in direct deposit to have their checks automatically deposited into their credit union account each payday.
• Now that your child is driving regularly, they may inquire about getting their first car soon. Take them with you to look at vehicles and compare prices for different features. This is an excellent opportunity to review needs vs. wants!
• As your kid becomes more independent, open a checking account at the credit union and include a debit card. Teach them how to review their balance and transactions through digital banking. 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 much financial wisdom for you to bestow upon them. 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. And it allows you to introduce the concept of credit reports and scores.
• If your young adult is heading to college soon, 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 and suggest setting up automatic transfers. Discuss the differences between gross and take-home pay and how to factor that into their budget. 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 with them and help them 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.

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.