3 Ways I’m Teaching My Toddler About Money

There is a comment lament in personal finance spaces that financial literacy and “money” are not taught in schools.  As a teacher, I can say that that’s untrue, there is financial education curriculum. Yes, there are issues with financial literacy instruction in schools, but that’s a topic for another time.  

Why I bring this up is that like most foundational skills (think reading and writing), I believe learning starts at home. So as a money nerd, trained teacher, and mom, it’s time to put my money where my mouth is.

My toddler is now of the age where she can recognize letters and numbers and can spell her own name. So for me, it goes without saying that it’s time to start teaching her about money too.  Or at least exposing her to financial concepts in an “age-appropriate” way. 

With that in mind, here are 3 ways I’m teaching my toddler about money. Keep in mind that I believe parenting is a series of experiments.  These 3 ways I’m teaching my toddler about money are not the be all end all, they are just what I’m currently experimenting with.

If you have a toddler at home feel free to try some of these experiments yourself. And if you do, let me know how they went in the comments section below.

Toddler Money Lesson #1 – Money Jars

I’ve read a few books and blog posts on teaching your kids about money and the topic of allowances always comes up.

We’ve decided to start an allowance with our toddler, but not to tie it to chores. For now, our daughter gets a weekly allowance of $3 because she is 3.  We will increase this amount as she gets older. 

Every Tuesday she gets 3 loonies, one for each of her Money Jars. One jar is for spending, one for saving, and one for sharing. She doesn’t quite have a grasp of what this all means yet, but she likes putting loonies into the jars.

And to further give her some ownership of her Money Jars we decorated them together.

3 Jars decorated with the words save, spend, share
My toddler’s money jars – she is very proud of her decorations.

One cold morning while her brother was sleeping we got out the craft supplies and decorated 3 canning jars I had in the basement.  My dad cut slits in the tops of the jars and they became instant piggy banks.

The jars sit on a shelf in my daughter’s room and she is so proud of them. Sometimes she wants to take them down of the shelf “just to look at them.”

She has yet to “spend” any of the money in her jars, but each week we have a conversation about money and the jars when she adds more loonies.  

Eventually, if we are at a store and she wants something then we can have a conversation around cost and the money in her spend jar.

Toddler Money Lesson #2 – The Cash Register

The second money experiment was my favourite gift that we gave my daughter last Christmas.  I found a cash register at our local second-hand store and just “had” to purchase it.

The keys function as a calculator and the drawer makes a little ding sound when it opens.  And the best part, the money inside looks very realistic.

Canadian play money - $20, $10, $5, quarter, dime, nickle
Canadian play money – looks very realistic.

This doesn’t look like pay money, it looks like the money we keep in our wallets which makes it more real for her. Yes, we keep cash in our wallets from time to time.

I also bought her little price tag stickers so that we could play store. But we have yet to experiment with those.  For now, she likes to take out the cash register, give me all the money inside and then type in prices for her toys so that I can purchase them.

She doesn’t quite understand the value of money yet, some of her toys end up being ridiculously expensive. But she’s learning about transactions and that different bills have different values.  We are also practicing the names of the coins and what they are worth.

Because we’ve made this into a little game, I’m sure she doesn’t even realize that she’s learning. Gamification is a great teaching and learning strategy at any age, but can be especially effective with toddlers.

Toddler Money Lesson #3 – Role Modeling

And finally, probably one of the most important ways I’m teaching my toddler about money is by role modeling positive financial habits. Money is something that is frequently talked about in our home and our children often hear these conversations.

We want them to see and hear mom and dad interacting with money. We talk about saving and investing and have even started to calculate the net worth of our little ones.

My daughter sits beside me as a deposit rent once a month and she loves working beside mom. She has visited our rental properties with us before. And although she doesn’t fully understand things at this age we think it’s important to just have her exposed to our financial habits.

When money is not taboo in the household, there are teachable moments that will constantly present themselves.  Here are some of the other money teachable moments that have come up:

  • Reading books about money
  • Taking our little ones grocery shopping with us
  • Sorting coins from a piggy bank
  • Answering any money questions that come up
  • Having conversations about hand me downs and toy sharing
  • Talking about why mom and dad have to work
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Final Thoughts

I am by no means a perfect parent. And it’s very possible that these experiments with teaching my toddler about money do not provide the results that I’m seeking. But that’s what parenting is all about, trying and pivoting.

At the toddler age, my daughter doesn’t really have a vast understanding of money. But I believe that it’s important they she’s exposed to it. This doesn’t mean I’m doing hardcore money lessons with her every day. Right now it’s more of an explore through play strategy.  I don’t want her to ever feel stressed by money.

As our children get older our experiments will pivot and shift. The ultimate end goal is for them to be financially literate, responsible with their money, and to not have to rely on a partner to financially thrive. Only time will tell how well these experiments pan out.

What about you? What experiments have you tried when teaching your children about money?

8 thoughts on “3 Ways I’m Teaching My Toddler About Money”

  1. That cash register and play money idea is super cool and incredibly cute.

    Have you thought about offering interest bearing investments to your kids like GICs? With play money, of course. E.g. offer to “lock up” their $10 for a few months and they’ll get back $11 – free money!

    1. AL – offering interest-bearing investments is a great idea. I think that we will eventually get to that point but our toddler is still a bit young to fully understand the concept. Sometimes we miss weekly allowance day and she is never bothered by it. I think once she gets to actually spend her money on something it might start making a bit more sense to her.

  2. I have to say that I don’t have kids but when I was growing up my parents were pretty frank about money in our house. I knew (at least sort of) what a mortgage was when I was in kindergarten. My dad taught me both the power and pain of interest. I was one of very few people who didn’t wrack up massive credit card debt as my dad was great at teaching us about how the interest was calculated and the danger of minimum payments. Also cash advances on your credit card!

    Being open about money, making it real with time are lessons that can’t really be replaced and should help your kids build a healthy relationship with money.

    1. Pam – your dad sounds like a great teacher. I agree that just making money relevant throughout our daily lives can make such a huge difference with kids. We plan to just teach as we go and making it fun along the way.

  3. Is this the cash register from Learning Resources? haha! This post inspired me to find a cash register for my kids and I found one used for $8! But it doesn’t have the Canadian money just the American money. Great post!

    1. GYM – yep that’s the one! I have found it at a few second-hand stores here and both times they had Canadian money inside. You can buy a Canadian money kit online – but it’s much more expensive than second-hand.

  4. Ohhh how cool is the cash register?!

    I wondered when to start pocket money – mine is 3 – but he is really starting to get numbers now. I’m thinking a base allowance and as he gets older he can earn extra through bonus chores/housework above the minimum.

    1. NZ Muse – I love the cash register and my toddler takes it out every now and then to play with it so it’s a win-win.

      Great idea with the allowance. Try it out and see what happens and you can always adjust and adapt as you go. We’ve started with our 3 year old and sometimes we miss weeks and she hasn’t noticed yet. But she does know that it’s her money and what each jar is for so that’s progress.

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