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Financial Wellness for Families: Teaching Your Kids About Money Management

This post is sponsored by Canopy Credit Union. Learn more about Canopy Credit Union here.

From mastering shoe-tying to safely navigating streets (remember to look both ways), your kids will learn numerous important life lessons at home. Imparting financial wisdom should be high on your list of crucial topics. Teaching your kids the importance of managing money with real-life, age-appropriate examples can set them and your whole family on a trajectory toward financial wellness. 

Starting while your kids are young, it is essential to incorporate financial education into everyday life. A study from Cambridge University shows that by the time kids are seven, they understand the concept of money transactions and are already forming financial habits. Now, it is okay if money management has yet to be part of your family’s dialogue. Starting even when your kids are older will still greatly benefit them as they prepare to launch into adulthood. 

While educating your kids on such an important topic may feel daunting, there are multiple ways to integrate financial education conversations into day-to-day life. Check out these age-appropriate ideas for teaching your kids about money management:

11 and Under

Visualizing money

Starting as young as preschool-aged, practice counting money! Use a variety of coins and bills to help kids understand the value of money. At the kitchen table, lay out 100 pennies and explain how together they equal one dollar. Then take 10 one-dollar bills and compare them to a ten-dollar bill. By allowing kids to practice handling money and counting it, they will gain more understanding of money’s value.

Person Putting Coin in a Piggy Bank


As early as five years old, implementing an allowance can be a fantastic way to give kids the opportunity to manage money. Starting with $5 a week, have conversations with your kids about what they can do with their money: save, spend, or give. 

Open a savings account

Most financial institutions offer kid-specific accounts that come with special perks.  At Canopy Credit Union, kids 11 and under receive prizes such as Canopy swag and activity books when they visit the credit union. Also, they can use the coin counter for free, making it easy to deposit their savings into their account (jointly held with a parent or guardian).

Make savings fun! 

Use a special piggy bank at home for kids to keep their money in a safe place. Make sure to make routine trips to the credit union or bank to deposit their cash into their savings account. By adding an element of fun to these trips (getting a sticker or visiting the park afterward), kids will associate going to their financial institution as a positive experience. 


Little ones will soon learn how far their money will go when they walk down the toy aisle. Allowing kids the agency to spend their own money will give them the opportunity to prioritize what they want. Have conversations about what are needs and what are wants. As their parent, you likely have covered most of their needs (toothpaste is essential).

Teaching kids to think through their wants and allowing them to make purchases that they might be dissatisfied with will teach them valuable lessons. Who knows, maybe they will realize the power of saving when they see something expensive that they want.

Giving money

Instilling financial generosity also starts young! When talking with your child about what they can do with their money, explain what it means to give to others. This lesson can also be taught by modeling and giving for yourself! As a family, come together and talk about giving to an organization that matters to you through a donation drive.

Lessons at the grocery store

When shopping at the grocery store, explain to your kids your thought process. For example, if a brand of milk that you don’t usually buy is on sale, explain how you will save money. Make it a game by teaching kids to look for “sale tags” and count up all the discounted grocery items that make it into your cart. 

Teens (12-16)

Basics of budgeting

As your kids reach their teenage years, their relationships with you, the world around them, and money change as well. These years are crucial for instilling the basics of budgeting. As teenagers gain more independence, it is your job to provide them with money management tools to help them. Encourage them to track how much money they earn from allowances and part-time jobs as well as how much money they spend. 

Coach your kids to not spend more than they earn, so they learn how to live within their means. Together, come up with saving and spending goals that make sense for them and come with an incentive at the end. For example, some families may offer to pay half of their teenager’s first car if they save the other half.

Saving for the future

Teaching about the difference between short-term and long-term savings goals is essential. A short-term goal is a smaller dollar amount and takes less than five years to save up for things like a phone, car, or vacation. Meanwhile, a long-term goal often comes with a larger price tag and a longer timeline. Long-term goals include a college education, a house, and retirement funds.

According to psychologist Leslie Riopel, MSc., “setting goals helps trigger new behaviors, helps guide your focus and helps you sustain that momentum in life.” As a family, write down your financial goals, encouraging your kids to come up with their own. Obviously, these should be catered to their age and stage in life. Display these on the fridge as a visual reminder of what you are all working towards.

In their teenage years, kids are beginning to develop a better concept of the future. By instilling the desire and ability to set smart financial habits and goals in them while they are young, they are more likely to continue to make wise steps to plan for their future. 

Family fun day – planned by your kid! 

Give your kid an exciting opportunity to plan a day out for the whole family. Provide them a set budget (say $100) to pay for an activity or two that everyone in your family will enjoy. While their original idea may be to go roller skating, get lunch, go to the movies, and get ice cream, they will quickly realize how far $100 will actually go. With the independence to tackle this challenge, your child will learn how to navigate a budget while still coming up with creative ways to have fun! In general, inviting kids into the process of financial decision-making will help them understand better and make it easier when you need to say no sometimes.

Boy in Gray Long Sleeve Shirt Putting Coins in a Piggy Bank

Digital literacy – financial edition

For better or for worse, your kids are also learning financial education from the internet. Have a conversation with your kids about discerning what is accurate information and what they should disregard. Social media ads are a place where most people can get tripped up. Encourage your kids to research sketchy websites before purchasing from them.

A good rule of thumb that will cultivate healthy financial habits is to veer away from instant gratification by waiting at least 24 hours after seeing something online before purchasing it. A day later, your kid may realize that the coolest new water bottle isn’t worth their hard-earned money, and their old water bottle works just great.

Upgrade to a checking account!

As teens begin to exercise more independence and bring in their own money (woohoo for allowances and part-time gigs), it is time for them to learn how to use a checking account. Checking accounts are designed to access everyday money quickly, while savings accounts tend to be used for saving and growing money. 

Canopy Credit Union offers savings and checking accounts for teenage members. Kids under 18 still need an adult joint member on their account, so don’t worry parents – you’ll be in the know still! With a checking account comes a debit card and a whole new important topic to educate your kids on. It can be a learning curve to understand the impact of a purchase when it feels much easier to swipe a card than it is to fork over cash.

Encourage your kid to utilize the mobile app to check on their account and make informed decisions before purchasing things with their shiny, new debit card. Remember, your actions are modeling to them how to use money, so make sure you are following your own advice. 

Young adults (17-22)

Re-evaluate wants vs. needs

As your kids are preparing to move into adulthood and one step closer to true financial independence, it is wise to reevaluate what they consider wants vs. needs. Sit down together and, with a whiteboard, encourage them to list out everything they need and everything they want. There might be some things that land in more of a gray area (is Spotify really a need?). Instead of focusing on persuading them to completely get rid of certain wants, ask insightful questions to help them come to a thoughtful conclusion. 

Living within their means

With their first “adult” job, a more sizable paycheck hitting their bank account will cause some excitement. Learning to steward this money well while making sure that all the other “adult” bills get taken care of is essential. The 50-30-20 budgeting rule is a great place to start. 50% of their income goes to needs, 30% to wants and 30% to savings.

This ratio is just a starting place, though, and can be altered to fit the life of the individual. Encouraging your young adult to utilize a budgeting app or tracking system will help them know where their money is going and stay within their means. 

Managing credit 

At 18 years old, young adults can begin to build their credit. Starting with smart financial moves when young will lead to building a higher credit score because of the length of their credit history. Credit cards are likely the first place young adults will start to build their credit. However, you probably have heard the horror stories of young people damaging their credit by overspending and then getting trapped in credit card debt. 

Silver Iphone 6 Beside Red Visa Card

Financial education is key here to ensure young adults understand best practices for credit cards. Explain to your young adult that it is crucial to pay off your credit card bill every month on time, to never spend over the limit, and to consistently check their account so they know how much they are spending. 

With Canopy’s young adult account, first-time credit card holders can have access to Canopy’s uChoose Rewards Visa, starting off with a $500 limit. With no annual fee, this is a fantastic card to begin with. For someone who is just beginning to build their credit, a great place to start is to put just a few automatic payments on their card and make sure to pay it off each month. That way, they are building credit while still practicing using their card.

Understanding loans

If they haven’t yet utilized a loan, it is likely that your young adult will soon! Between auto loans, student loans, mortgages and more, lending is often a necessary step in today’s economy. Having a basic understanding of what a loan term is, what a down payment is all about, and why there are interest rates and how they impact the overall amount needed to pay back, are three important concepts young adults need to know.

It is good practice to shop around for loans instead of going with the first option. Be ready to talk more with your young adult about loans when they come asking for advice!

Meet with a Financial Coach to learn more

To learn more about how to integrate financial education into your family’s overall financial wellness, set up a time to meet with Canopy Credit Union’s financial coaches. These FREE, personalized conversations are designed to help you set and achieve your financial goals. Anyone can meet with a Canopy financial coach and utilize them as an expert and guide. Log on to canopycu.com/coach/ sign up today!


1 – https://mascdn.azureedge.net/cms/the-money-advice-service-habit-formation-and-learning-in-young-children-may2013.pdf 

2 – https://positivepsychology.com/benefits-goal-setting/ 

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