Teaching Toddlers About Money – The Pebble And The Dollar

by The Happy Rock on February 5, 2009

child-kid-jumping-balloonThe Happy Pebble(age 3) couldn’t contain his excitement as we pumped up a 3 foot long ‘rocket’ balloon and watched it sputter around the room. For him it was the joyous culmination of a life money lesson that he didn’t even know he participated in.

The story begins with the Pebble and I making a few homemade thank you cards for gifts received at Christmas. It took us a few weeks after the holidays, but gratitude is better late then never. We mailed the cards off and in not too long he received a surprise letter in the mail from his Great Gram. It had a return thank you note saying she loved the card that it was hanging on the fridge. She even reinforced her gratitude by including a single dollar as a surprise!

The Pebble was elated, since he is usually happy to nab the spare change from around the house and throw it in his piggy bank. His very first dollar. His joy grew after I mentioned that we should go to the store and buy a toy.

The next day The Pebble, Pebble Junior, and myself spent a good hour in Target. I had to stay patient because this is where the real magic happened and where he began to understand the power of a dollar. He would point to toys and I would kindly explain that it would be 10 of the dollars he has. He happily kept looking and asking, but wasn’t willing to accept the toys that he could afford. He also wasn’t willing to ‘save’ the dollar and wait so that he could get something bigger, even offering to kick in some money for the effort.

Eventually after looking through all 10 aisles more than once he realized that he couldn’t afford something big and happily settled on Rocket Balloons. It included a mini air pump and long balloons that you pump up and let go to see them rocket around the room. Even though it was twice what he had(I didn’t tell him), it was still under $2 and he had learned a lesson in the value of a dollar and had great fun doing it. He shyly gave the money to the cashier and beamed with excitement until we could open the package and start playing. Lesson over.

Any readers have great stories to share on how they are teaching their toddlers about money?

{ 9 comments… read them below or add one }

Kristy @ Master Your Card February 6, 2009 at 2:15 am

That’s a great story, Happy Rock! I’m trying to help teach my nephew about money – mostly because his dad is terrible with money and I don’t want my nephew to turn out like that, but also because my sister asked me to. I took him to the bank and helped him set up his account and told him how it worked. Of course, he’s 3, so he probably didn’t get everything I was saying. I suppose this is all great practice for the day when I have kids, but in all honesty, I don’t really know how to go about teaching kids. Sometimes I find it hard to break this stuff down for adults, I couldn’t really imagine doing it for kids. I’m looking forward to your readers’ suggestions and stories on this one!


The Happy Rock February 6, 2009 at 10:30 am

@Kritsy – Unfortunately for your nephew one of the best ways to learn is by watching their parents. If parents are building string financial skills and discipline it will permeate through the child’s lives.

With that said, Zen Habits has a pretty great article on child and money that has some great general examples. It basically boils down to taking the lessons you learned or are learning and trying to make them applicable to the age of the child. The biggest part is that it takes intentionality and thought on the teachers end.


Ed February 6, 2009 at 12:03 pm

HR, good, well written story.
I think one of the best, early lessons that we can teach our children about money is the value of delayed gratification. Sometimes I do this with my kids. I tell them you can have one cookie now or two after our movie. Children who learn the value of waiting, won’t have money burning in their pockets.


Money Funk February 6, 2009 at 4:29 pm

I love watching my daughter shop because she follows the same situation as Happy Pebble does in the store.

Its amazing how conservative they are with their own money, but gets hastily spent if its ours! lol!

Great post!


Isabelle Schiffsversicherung February 7, 2009 at 11:31 am

I really like your story! Teaching kids about money matters is very important. I like how you teach your kids to only buy what they can afford. Sometimes, there are parents who can’t say “No” to their kids. They would instantly buy what their kids like because they thought this could make their kids happy (but they don’t know that they can also make their kids greedy and not contented).

When my son and I go out to shop and if he saw some toys he really really like but all those toys are basically the same. I just asked him to choose the toy he likes best because we can only afford to buy one. He would then happily spend a couple of minutes thinking which is best. Actually, I can buy all the toys he wanted but I want to teach him some lesson to choose only the best and be contented. In this way, he can also develop his decision-making.


Josh February 9, 2009 at 8:32 pm

Great lesson for the pebble Happy Rock. My wife’s Aunt gave my son a dollar at Church on Sunday, and he promptly ran around with for a bit, then carelessly threw it at some other kid. Ha! I guess the concept of money hasn’t quite stuck on him yet. Although my daughter is quite on point when it comes to monetary units. When she earns her 10 “stars” for good behavior and weekly accomplishments, she knows there are things at Target that are well out of her prize price range and has to stick to the dollar bins. When she gets a bit older I will take her down to TD Bank and open up an account for her so she can learn the fundamentals of saving and accounting for money. But 4 years old is a bit early for that now.


Patrick February 11, 2009 at 7:03 am

Cool. My wife and I have our first on the way. I can’t wait to have similar stories. Thanks for sharing. :)


Grog February 12, 2009 at 12:54 pm

Good For You….it’s always nice to here stories from other adults with children. Although very young, I hope I can teach my son the value of a dollar. I hope that he won’t inherit traits from his mother in law. :)


Simon September 3, 2009 at 9:38 pm

I am expecting to become a dad soon (my wife is carrying) and I am on look out for tips on how to grow my child in a much better way. This post, and the Zen article on child and money are of great help. Thanks a lot!


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