How To Introduce Money To Your Toddler

As parents it is our job to make sure that our kids become well rounded adults. Financial literacy is part of it and you can start teaching it early on. Here’s how to introduce money to toddlers so you can hit the ground running with your children’s financial education.

There are many ways you could introduce money to your toddler, but the most important thing is to talk about it.

Toddlers, and children in general, are naturally curious about the world, so it shouldn’t be too hard to peak their interest when it comes to money.

My 3-year-old daughter has always been interested in coins and early on enjoyed putting them into the money box she was given when she was born.

(This activity has of course always been very heavily supervised due to the chocking hazard, and I can’t stress enough that if you do let your young children play with coins you watch them very carefully so that they do not put them in their mouths!)

Now that she is older and our communication flows better, I decided to start to introduce the concept of money to her.

First of all, coins are an easy start on how to introduce money to toddlers

These days my oldest only gets to play with her money box when her little sister isn’t around.

But when we do play, I’ve made it more intentional.

For example, I now ask her to stack her coins based on color and size.

While this might not seem like much, but it is intentionally teaching her that there are differences in the coins.

She is not old enough to understand that the coins have different values, but knowing that there are five different ones and recognising them is a great base to build on once she is ready to understand value.

We are also doing basic counting with the coins, and as I already said, it is not accurate from the monetary value side of things, but the idea of counting them is a great base for that later on.

Talking about money

If you think about it, money is a bit of an abstract concept. Especially these days how we use cards and non-contact ways to pay.

Coins and notes are the physical representation of the concept of money.

It is important to talk about money to our children, at any age, and in its simplicity it is an easy way to introduce money to toddlers.

With my 3-year-old I keep it very simple. I’ve told her for example that we use money to buy food. And that dad goes to work to get money so we can buy things.

When we are organising the coins I tell her that coins are money. That she can buy things like donuts and ice cream with the coins. (She is a very food motivated child haha.)

She now says things like “Daddy gone to work to get money” and it is pretty cute.

Letting them buy something themselves

The next step I wanted to take was to let her take some of her coins and buys something small. A treat.

I specifically wanted the coins to be from her money box, and we took them out together.

This was because I wanted to teach that she would have to give something of hers up (money) to buy something she would like.

I told her in the morning that we would go for a walk and to a coffee shop where she could buy a treat with her own coins.

Then we took the money out of her money box and she held on to them until we were at the coffee shop.

My worry was that when it actually came down to it, she would refuse to give the coins up, which is why we talked about it.

I said “We can take some of your coins with us and we can use them to buy you a treat. When we get to the coffee shop you can tell the lady at the counter what you would like, and then you need to give the coins to the lady. You might get some back but you also might not. Then you will get your treat.”

Children are new to this world. Most experiences and situations are new to them. Talking through new situations before they happen can help them prepare for what is coming and make it less scary in the moment.

We went to coffee shop and it all went great. She put the money on the counter and I helped her order a donut. Then she ate it while we waited for my coffee.

As we were sitting there she said that she wants more coins. I told her that if she wanted more coins, she would have to work like daddy.

Then I offered that if she worked with me in the garden, I would give her some more coins.

She was quite enthusiastic about the idea so when we got home she helped me weed my overgrown garden bed (and when I say helped, she pulled a few weeds out and then called it a day, but what do you expect from a 3-year-old).

After that she said to me “Mum give me more coins now”, so I gave her a couple of coins ($1.50 in 50cent coins).

I was very pleased with how this experience went with my daughter and I look forward to build on on her understanding of money as she grows and start to give her an allowance.

Do you talk to your kids about money? Or plan to? Let me know in the comments!