While you should always try to make informed financial decisions, it’s especially important to understand the impact of financial education during each life stage.

Here are a few ways you can sharpen your financial knowledge and understand how to grow your financial capabilities at every age.

Financial education for children and teens

Now may be the perfect time to address the importance of financial education with children and teens. Many schools incorporate basic financial lessons, but at home you can also introduce financial topics and money management, including the below tips.

Consider an allowance

It’s important to teach kids how to save. Consider giving children an allowance as a tool to build their financial education. Have them save a portion of their allowance – whether it’s 10 or 20% – and keep them informed of their progress over time. Teaching money basics can be simpler when children have real money to learn and interact with.

Establish long-term goals and accounts

Children like to be given opportunities to show their responsibility. One way to do just that is by setting up their own youth savings account. Not only does this give them a financial foundation, but it also allows them to make measurable savings goals. As children approach their teens, discuss a car-buying goal and keep them involved in the savings process.

Graduate this goal into giving teens hands-on experience with spending. Once they have a car, they will need to make purchases for gas, their weekly outings, or their car insurance. If they have a part-time job, make sure they save some of their earnings and appropriately budget the remainder for their expenses.

Have honest financial conversations

Just as it’s important to show and teach how to save, have an open, honest dialogue with your children about money mistakes you have made. Bring your kids into the conversation and discuss how and why the mistake was made, and what you have done or plan to do to resolve the problem.

Learning about finances in your 20s and 30s

As you enter young adulthood, you should understand the basics of budgeting and the responsibilities that come with financial independence. Here are ways you can improve your financial capabilities at this life stage.

Secure your financial foundation

As you take on expenses such as rent/mortgage payments, phone bills and other monthly payments, map out your monthly budget—and stick to it. Financial capabilities at this age sometimes means limiting the nice-to-have expenses, such as eating out or traveling. One of the most important elements of your financial foundation is a savings plan. As a rule of thumb, your savings should include an emergency fund that can cover at least six months of your expenses.

Research large purchases

This life stage is often the first in which you will be faced with making big-ticket purchases and saving for future purchases. Research is an important stage in the purchasing process. Make sure you are getting the best value by shopping and comparing before making a major purchase or taking out a loan for an expensive item.

This also means staying on top of credit card and student loan payments. Try to steer clear of additional debt or missing any payments, which can negatively impact your credit score.

Take advantage of offerings from your employer

As you enter the workforce, learn about the programs your employer offers. Many businesses may offer 401(k) plans, tuition reimbursement and wellness incentives that can help cut costs. Even if retirement is 40 years away, saving now can make a difference in the long-term growth of your portfolio.

Financial strategies for your 40s and 50s

As you enter this age range, financial education and focusing on the long-term is more important than ever. Three ways to improve your financial foundation at this life stage include:

Consider increasing retirement contributions

Your 40s and 50s may be your peak earning years. There are many ways you can maximize your earnings during this period, such as using your professional know-how to start a side business, seek a promotion, or search for career advancements. These can help increase your income with the goal of saving more for your retirement.

Eliminate your debt

While you may have accumulated debt from student loans, car purchases or a mortgage, now is the time to trim debt.

With interest rates on the rise, talk with your financial team to see if refinancing any loans makes sense for your financial picture. In general, the financing decisions you make at this stage can impact your long-term plan and goals.

Adjust your budget as your life changes

As you get older, you may have children move out and gain financial independence. You might also downsize your home. Or, in some cases, you may assume additional financial responsibilities if your parents require support in their golden years.

Whether you experience an increase or decrease in your spending, adjust your budget and savings. Take advantage of a financial partner to help navigate a more robust savings strategy and walk through the steps you need to take as you near retirement.

Staying savvy in your golden years

As you enter this life stage, continue building your finances by:

Establishing a post-retirement budget

Once you retire, your budget will look completely different. While this can be unsettling if you have been following the same general budget for decades, it’s an important and necessary transition. Work closely with a financial partner to determine your strategy as you start tapping into your retirement funds and create an entirely new budget for your changing finances. At this stage, you need to know how much you can continue to save.

Determine when to start using Social Security

The minimum qualifying age for taking Social Security is 62, but you may not want to opt in immediately. If you already have a strong retirement plan, you should consider waiting until you reach the full retirement age, which can allow you to receive larger payments.

Keep investing

Reaching retirement does not mean you should abandon your investment strategy. Maintain an investment strategy that allows you to address your future financial needs.

While you should work with a financial partner to determine the mix of savings and investments you are most comfortable with, both are important to make sure you continue earning money after retirement.

UMB personal banking solutions offer convenience and simplicity to meet all your financial needs. Boost your financial know-how and sign up for our personal banking newsletter. We’ll send informative articles right to your inbox.