Teaching My Toddler About Money

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We aim to teach our kids financial responsibility from a young age. We use age-appropriate lessons to relate the concepts of work, compensation, earning, giving, savings, and trade-offs.

But what does that look like in real life? It’s been a little bit of a roller coaster in these younger years. While some days it’s understood that mommy or daddy has to go to work so we can have money for our food, shelter, and toys, other days we’re met with an all-out tantrum as we walk out the door.


Which is a lesson in and of itself to all involved. Amiright?

But there’s other ways we’ve been successful, and sometimes had success surprise us. Out of the mouths of babes you’ll hear your own values, and learn what’s really valuable in life. Here’s what’s happened as a result of teaching my toddler about money.

You want WHAT for Christmas?!

This time of year we really hone in on the Santa thing to modify behavior. Maybe we’re wrong for doing so. Or maybe we’re really right. Because it works. As we’ve been discussing naughty and nice, we’ve also been asking the age-old question, “What do you want for Christmas?”

Want to hear what my toddler said?

“New house!”

We looked at each other in shock. They must have heard us talking about our goal. They must understand it’s a goal. Maybe they’re cramped. Maybe they want their own room. Maybe they don’t want to have to walk half a mile to the nearest park just to play outside.

Maybe they don’t really understand, and just know they’ve heard us talking about it as a “want.”

Unfortunately, Santa’s not going to be able to deliver this year. Even if he could magically fit a single-family dwelling into a stocking, we’re still saving up money for that down payment. Even though we know we won’t meet our goal by Christmas, it has lit a fire under us to keep on keeping on, and not get discouraged by set backs, or the super long timeline around this financial goal.

Infantile Savings Goals

Savings has been up and down over the course of their  young life. For their last birthday, a family member gave them a sum of money to go on a child’s dream: an all-out toy store shopping spree.

It was fun to say the least. We let them have total control over what they picked out. And were all too  happy when one of those things was a kids’ bank.

Over the next couple of weeks, we encouraged them to do things like clean up or put laundry away. In exchange, they’d get a coin to put in the bank. Those coins were being saved up for another trip to the toy store. The lesson was being understood.

But then the memory of that trip to the store faded. It became more and more abstract with the passage of time. Defiance kicked in and we found ourselves cleaning the living room without teeny hands to help.

The other week something magic happened. Recalling our super fab, super frugal trip to Myrtle Beach, our toddler started talking about it. Begging us to go. Recounting all the things we did and all the people we met. Their memory is getting longer.

At first, we said it was too far. We asked if they wanted to spend all day in the car. The answer was no.

But the beach demands continued. We checked ourselves. The real reason we’re not heading for warmer climates right now isn’t the drive. It’s the obligation to work. It’s the extra money required to take time off.

The next time we got asked to go to the beach, we told them we needed money to go. You know what happened? The living room was suddenly being cleaned, and not by the adults. The clinking of coins returned to our household as that bank started filling up a little quicker. The tantrums when we left for work slowed.

Our toddler has a financial goal.

We didn’t just leave it at savings. When we’re struck with incessant pleas to go to McDonald’s, we ask which they want more: McDonald’s or the beach? The answer is always the beach. We’re learning about sacrifices and prioritization. We’re learning about financial responsibility. It’s all being done before full sentences are emerging from their mouth.

Teaching My Toddler About Money

It’s never too young to teach your kids about money. I don’t think they should be stressed about it. Everyone deserves a childhood free of adult-classified worries. While we’re not telling them why Santa won’t be stuffing a new house down the chimney, we are taking advantage of small opportunities to teach responsibility. To teach about long-term savings. To teach about trade-offs. And once that bank is full, hopefully we’ll be able to impart lessons about giving, too.


How do you teach your kids about money?


16 thoughts on “Teaching My Toddler About Money

  1. Hannah

    These are great ways to teach really young kids about money. With the exception of things we already have in the house, my son doesn’t really ask for much (well that and snacks). We’ve been trying to teach him about connecting money to work, but we’re so inconsistent that my son doesn’t get it.

    1. Femme Frugality

      The consistency is hard. In any aspect! Either my kid is incredibly materialistic, or they have been mirroring our financial values: travel and a new home. The fact that it’s happening at such a young age is eye opening!

  2. kay ~ the barefoot minimalist

    I’m not sure we taught our son much about money. We were pretty fortunate that he wasn’t into clothes or anything else expensive, really. He had way too much stuff, but that was mostly a grandparents thing. I think you guys are doing a great job with the money lessons. It’s not easy teaching children, or adults for that matter, about the joys of delayed gratification.

    1. Femme Frugality

      Homes and vacations at a young age…. We’re screwed. Lol. The stuff and grandparents thing holds true in our house, too! We’re going to have to do some toy purging before the holidays here. And all the way on delayed gratification. This is really reinforcing lessons for us, too.

  3. Kara @ The Daily Whisk

    I’m lucky that my kids haven’t started to ask for things yet, but it’s getting close with my 4 year old…
    Anyway, so far I just involve them in going to the bank to deposit their money into their own savings. I tell them their money is safe at the bank. That’s as far as I’ve got! 🙂

  4. Jana @ Jana Says

    We made sure, from a younger age (well, once she was old enough to start understanding the concept of money. Probably in kindergarten), she understood the difference between wants and needs, of having savings and spending money, and other parts of managing your money. We did it in simple ways, like having a spend jar and her fancy savings piggy bank and making sure she knew that we went to work to earn money so we could have things. We’ve never had full on lessons, but making sure she hears discussions and we’re open about money with her (again, at an age appropriate level), she really does get it.

  5. Emily @ JohnJaneDoe

    Your toddlers are more advanced than my kindergardner! We went to Myrtle last year, and she still talks about it and Pirate’s Voyage. I will say our no-spending month has been good for her. We went to the grocery store, and she wanted a snack. When I told her she had to spend her own money to buy it, she started looking for the best bargain.

  6. Andrew@LivingRichCheaply

    I definitely think it’s a great idea to start teaching your kids about money at a young age. Fortunately for us, my son is still at the age where he doesn’t ask for anything. But that’ll probably change soon. I think one of the best way to teach kids about money is to just be a good role model and to explain financial decisions to them. Many parents don’t talk about money with their kids thinking they’re too young to understand.

    1. Femme Frugality

      I almost started to doubt my parenting hearing about toddlers who don’t ask for anything, but I’m checking myself. I have some very lucky readers! But developmentally kids this age want and become what we generally view as selfish as they’re learning to negotiate their own needs and wants with the world around them. It’s a tiring process, but it sounds like your son is going to be in the best hands after it kicks in!

  7. Prudence Debtfree

    Wow! I never considered teaching my kids about money management when they were toddlers. But clearly the big concepts can be grasped even by the very young. I really hope that you all get to go to beach again, and that house will be in your stocking at just the right time : )

    1. Femme Frugality

      Thanks, Ruth! I’m hoping the same things. It’s powerful to me, too, that they are primarily reflecting our own wants and values at such a young age. I’m not horrified by what I’m seeing, but it’s a good reminder to be vigilant in our example always.


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