How To Teach Your Toddler The Real-life Skill Of Saving And Earning Money

If there are some lessons that we cannot learn enough, one of them is about money. And if there is a topic that we parents eschew due to its utter complexity, it’s about finances.

When my six-year-old son requested for my credit card to pay for an online game, I realized that it’s about time to teach him a money lesson. You might think that your toddler is too young to understand the vast world of finance, but there is no better time for him/her to learn about money than now.


Topics such as equities and investments are too complex, they don’t need that. What they need is a parent’s first-hand advice and guidance on how to handle money, because this is a survival skill that can make or break their future.

Money Lessons: No Shortcuts On Learning

teach your kid about money

Our initial money talk about credit cards and coins turned into a long discussion. Two years into it, he is already a preschooler now and we are still not done talking. Maybe this lesson will take him a lifetime to learn; partly because I’m also not done learning about it myself.

I realized how little I knew about making the most out of my money, but I must teach him nevertheless. You see, I am just like you. I am not a financial analyst or trader but a regular parent whose experience in terms of money revolves around working for a salary and paying the bills.

As a parent, it is our sole responsibility to teach our kids about this valuable life-skill. Why? It’s because this topic is rarely taught at school. How can we do it? It takes just one step at a time, beginning with these tips.

Tips To Teach Your Preschoolers And School-Age Children About Money

1. Start them early

small kid

Introduce the value of money to your little one by teaching about how it can be saved and how it can grow. Make use of real life situations. Bring your child to the bank. Start a savings account under your child’s name. Let him give some cash to deposit to the teller.

Ask your bank, they might have a program for young savers or can accommodate a tour to give your child an idea of how banks are run. Give your child a piggy bank. Let him save his spare coins and tell him to track his savings as it grows. It is important that he first recognize the value of saving money before you go about teaching him how to spend.

2. Take him to the grocery

kid at grocery

During this time, he must have already learned the basics of numbers. He can already discern the concept of value as related to the price. Let him have an insight that each item has its own value and not everything is priced equally. Sharpen up his budding math skills by identifying your common household needs and quantifying how much they cost.

Demonstrate to him how to spend and how to trade money to get something else. To do this, give him a small allowance to take with him to the grocery. Instead of pointing out everything, let him check for himself how much each candy or chocolate bar is worth, in relation to his set “budget” in coins.

3. Play money-themed apps and games

If your child is already well-versed with electronics, instead of playing the usual games, let him instead learn money management with apps such as FamZoo, Savings Spree, Cash Flow for Kids, Save the Game and Pay Day.

You can also play with your kids some classic games such as Monopoly and Cash Flow. This is a great way to make learning finances fun for kids. Money games are also useful for parents who are still hesitant to lecture their kids about money.

4. Teach him to have saving goals

During this age, he must realize that money is not infinite. It is not something that can be withdrawn endlessly at the bank. He might be pestering you with his dream toy or vacation.

Allow him to create a wish list and to learn how to save up for it. He must equate saving as “cool”. Let him keep track of his savings and watch it grow. Set an amount that he must save every week and give incentive “interest” if he can fulfill his savings goal for the week.

He can be useful and learn how to be responsible around the house by accomplishing small tasks in exchange for money. Teach him a timeline and let him look up to it.

5. Introduce him to your household expenses and money obligations

Your child might be too young for now to understand how a credit card works. Nevertheless, let him know that you have financial obligations to fulfill such as your utility bills and your house and car mortgages.

Teach him responsibility by showing how a simple act of turning off the lights or shutting the faucet can help you to save on the utility bills. Let him see you in action while doing some budget calculations. Give him an idea about the consequences of not being able to pay the bills and mortgages on time. Understanding this concept will help your child to make better decisions, control their spending urges and be a responsible spender later on.

6. Delay gratification

A kid who can delay gratification will grow up more matured and in control of his impulses. Your child must learn how to hold back now or else, he will grow into an adult who always succumb to “buy now and pay later” schemes.

Manage his tantrums and slowly teach him how to reason. Let him discern the difference between “wants’ and “needs”. While at the supermarket, ask him questions such as “Is this something that we really need? Or can we go about even without this?”

Items that are classified as “wants” such as a trip to the amusement park can be earned through a merit or rewards system that you can set with your kid. He must understand the virtue about waiting, and how patience can turn out better in the long run.

7. Let them play in nature; don’t expose them to too much TV and internet.

Aside from disrupting their learning process and shortening their attention span, TVs, and the internet can do much more harm to young minds. TVs and the internet promote consumerism and violence. Your young child will be bombarded with a lot of innuendos over the air.

Just an hour of TV cartoons can pester them with enough toy suggestions to give you a headache. Likewise, you can hardly regulate what they see on the internet. Instead, let him play outside. Allow your child to dig some dirt and work some sweat in the backyard. You can also teach him responsibility and compassion by giving him a pet like a dog.

8. Curb impulsive buying

set goal

When your kid has cash-on-hand, allow him to make a budget. Let him list down his priorities and plans. It is important that he learn that there are better ways to spend money than outright splurging in on a one-time trip to the toy store.

You may also show him how to compare prices in between stores. Allow him also to appreciate the virtue of using coupons on certain purchases. What’s important is for your young child to learn that purchases must be planned and every money decision, no matter how small, must have forethought.

9. Show your child what lack is and what abundance is

The terms “rich” and “poor” must have been already familiar to him by now. Let your child move away from judgment but instead, teach your child how to share. Teach him how to share his time, his food or his money to those less fortunate.

Instill in him the value of gratitude in appreciation to what he already has. It’s important that he learn that he has money is not just for spending, but also for saving and for giving back.


Even billionaires have their own shares of money mistakes. As a parent, all of us have our own shortcomings in terms of handling our finances. Yet it must not deter us from teaching our kids about responsibility on handling money. During their early years, it’s up to us to teach them these money matters.

Being a parent, nobody else can do it better than you. The earlier you begin teaching them these indispensable life skills, the better. In this rat race called life, it is their values and on how they handle money that will ensure their survival. Your children can always just learn from their money mistakes, yet isn’t it better to do it right the first time?

Sarah Morgan

Chief editor of WellBeingKid.com and striving mom-extraordinaire.Let me share and inspire you with my daily struggles to live a healthier and more fulfilling life.

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