Teaching a Toddler to Save Money

My son is about to turn 4 and by now he knows all about getting presents at birthday parties. I can’t help the uneasiness that came over me thinking about all the toys he has collected over the past few years. And disturbed by his expectations for the number of presents and if he got what he really wanted.

In the past, I’ve tried to share with him stories about when I was a little girl, I only had a few toys to play with. However, I don’t think he can grasp the point I was trying to make. So I thought it was time to start teaching him about money.

My plan was simple. He has to work to earn and save money to buy something he wants or likes. My goal was for him to learn a few things through this process:



1. Experience how much work it takes to make enough money to buy what he wants.

2. Learn how to count and do basic math.

3. Learn to be patient when working towards a goal.

4. Learn to make choices for himself.

I also was very clear about how he can earn money. It has to be work done for helping someone else at their request. This means, he doesn’t earn money for cleaning up his toys, for finishing his food, or anything else that is his own responsibility for being part of our family.

There is a toy truck that my son has been hinting how much he loves. It was the perfect motivation to get started. I set the price at $10 (actual price is $12.99, but I wanted to keep it simple) I explained and showed him that 4 quarters is equal to $1. On a sheet of paper (see image) I created a ledger for him to keep track of how much money he’s earned, and enough space to write down how he earned it.

I let the other households in our apartment know that Oliver is available to work on small jobs for 1 quarter per job. Everyone was eager to help and they’ve “hired” him to help water their plants, take out the trash, or wipe a table. And after each earning, I help to write down the job description and we count how many quarters he has earned. I think the most important part is to review what work he has done. It makes good conversation too with your child the meaning of helping others, how did that make them feel when they finished the job, did it take a long time? which job did they like working on, or didn’t like as much? It’s also good to discuss what other ideas they have so they can earn more.

Out of his toy Duplo Legos, my husband helped to build a simple coin bank with an opening on top and one on the side. The money is easily accessible and my son can see the money inside any time he wants. I feel that this is a better visual than the traditional coin bank where it’s locked away in a piggy bank and only a grown up can access the money. Of course, if your child is too young and can put money in his/her mouth, then you’ll need a more secure container. A clear plastic container with a screw on top used in storing dried food products is a good solution. You and your child and decorate it and personalize it.

It’s been a week and he has earned $2.50. When we came across a small toy in the store that he can afford, I asked if he wanted to spend his money or wait to get the toy truck. He thought about it and decided to wait. I’ve since made him his own catalog by putting images of the item and how much money it cost in dollars and number of quarters.

I’m quite surprised and pleased with how patient he’s been throughout this process. I know he feels very proud when someone asks him how much money he has saved. At some point I do want to include that he can spend the money on getting someone else something or donate it. 40 quarters is a long way to go, but I know we’ll both enjoy the reward when the day comes.

annA Mom Knows Contributor

About Ann

After working over 10 years as an art director at the Walt Disney Studios, I became a stay-at-home mom. My experience as a first-time mom inspired me to publish a book called "Quick Tips For First-Time Moms: A Simple and Practical Guide to Finding Balance". I love using my creativity to solve problems. From organization to recycling, parenting to party planning, I continue to find new interests and inspirations through spending time with my child.

2 Responses to Teaching a Toddler to Save Money

  1. Abigail says:

    what a great article! thx.

  2. Emily Huston says:

    I know it’s very critical for a parent to impart sound financial values and habits to their kids at an early age. But we should never forget that the younger that kids begin to learn these life lessons the better they will be prepared for adult life and daily expenditures. I think we should start inculcating money saving habit right from the childhood by letting them know how money are earn and how wisely should be spent. But them a piggy bank with their name carved on it, this will attract them and will induce saving habit.