Money mindset at age 2? Yes! I became a brand new Mama in 2016 and it became my mission to teach myself a positive money mindset, so I could teach my son. In my opinion, money, money mindset and the understanding of wealth are essential life skills, just as fundamental as learning to read is to a child.
I wish I had learned to get my money stuff together a whole lot earlier, so my gift to my children is to start early! We tend to unknowingly pass on generational weaknesses and I really don’t want to be responsible for passing on my mega money drama to my children.
I’ve written this guide with real life examples. Use them as inspiration to start your own money lessons. A lot of what we do is an experiment and I often think of improvements to games or concepts, and then bring them in next time the opportunity arises. I am also constantly assessing if a conversation or activity is too advanced, too simple or can be presented in a better way. I then adjust as we go along. You can too.
1. Pay for things at the till together
Whether I have been paying by cash, card with pin, contactless, self checkout or Apple Pay, I’ve let Marley be involved. These are some of the things I encourage:
He hands over cash payments and receives change and receipts.
He holds my card ready to pay. He feels important and can often wait patiently until I say he can position the card for the contactless payment to beep, or put my card in the machine for me to tap in the pin.
He puts cards and change back in my purse after payments, or safely in pockets, so he begins to recognise that these have value.
I want him to see and understand the exchange. He already knows he can’t walk out of a shop with something without an exchange. He knows things we want to take home have to paid for. He may not understand the details of the transactions, but he knows how to pay and has the confidence to walk up to the till.
Learning time: 1 minute
2. Go to the cash machine together
I am often irritated on the rare occasions when I need actual cash (like when the window cleaner comes unannounced) but since young children are physical, literal and visual learners, I’ve used these as an opportunity to make these trips to the cash machine rather fun. We happen to have a handy wheelchair friendly cash machine near our house - Marley can reach the controls on tippy toes! We toddle off together and with a bit of help, Marley gets to put my card in, key in the instructions, tap my pin, listen to it whir, collect the notes and put them safely in my purse.
Using cash machines gives us a great opportunity to talk about what we’re doing, why we’re doing it, what the money’s for, how the cash machine works and anything and everything to do with money. It’s also a chance for Marley to handle real money in an age when everything is going digital.
Learning time: 2-5 minutes
3. Work earns money
Since Daddy leaves early to catch the train to work, Marley has always been fascinated by where Daddy goes. We’ve used this learning opportunity and explained that Daddy goes to work. When I drop him off on his nursery days or at Daddy’s Mums for his beloved ‘Nannie day’ I’ve explained that I go home to work in the garden office. Sometimes he helps Nannie with her work in her furniture restoration workshop. He knows that all the people in his circle work and he’s learning to respect, love and value work. In fact, if he catches me at my laptop, he will often say, “Mummy, please can I work?”
Although we have always explained why we work, recently he has been more engaged in the ‘why’ and I can literally see him process it all. This goes something like this:
Mummy, Daddy gone to work?
Because Daddy has to earn money. When Daddy goes to work he gets paid money. We use that money to buy food like cucumber, hummus and peaches (current favourites).
You know when we went to the shop to buy your balance bike?
You helped us pay the nice man at the till?
We gave him money so we could take your balance bike home. Do you remember?
Mummy and Daddy have to work so we can buy things like food, bikes and go swimming…
Distracted and off to play with something else (possibly halfway through that)!
Learning time: 1-3 minutes
4. Work, buy and sell games
When Marley does do work he sometimes gets rewarded. There are times when we define his activity purely as helping us for no reward (other than lots of thanks and praise). Like when we’re bringing in the food shop and he helps carry items into the house, he is simply joining in with important household duties.
But there are times when his concentration and effort deserves extra note. Marley has a simple race track star chart for this. He gets rewards for any good behaviour we feel needs rewarding such as tidying, good listening, good eating and helping to get himself dressed. When he fills the race track he gets a surprise which can involve going to the park, a play date or taking his completed chart to a shop and choosing something together as his reward (once again reinforcing that the right behaviour results in good things).
Recently, both hubby and I were tidying up upstairs from a particularly gruelling week (think clean clothes not put away, dirty clothes strewn on the floor and extra messy bathrooms). We explained that we were tidying up and gave him little jobs to do, like taking his clean clothes into his room and picking up his books and toys. He did an amazing job and we wanted him to understand that there are rewards for this level of engagement and effort so he got a tonne of praise and a star for his chart.
Sometimes Marley does a grand job of pretending to work. He loves mowing lawns with his toy mower and will often follow Daddy around when he is cutting the grass. One day he took his mower to his great grandparents and proceeded to spend a good 10-15 minutes, ‘cutting the grass’. As if they could read my mind, they gave him £1 for his good work. He was thrilled and tucked the coin safely into his pocket for placing in his savings jar!
(I am currently working on setting up an age appropriate chore chart. From about age 3, I think Marley will be old enough to understand that completing certain jobs earns him his pocket money).
Marley also loves to sell! I think this is great because I know that the ability to confidently sell will serve him well in life. So we’re doing everything we can to cultivate this and build up his confidence in selling. He has a little till which he uses for his pretend shop, or we’ll just act out buying and selling wherever we are. His current favourite is buying and selling ice creams:
Mummy do you want ice cream?
What flavour you want?
Strawberry and mango please.
I don’t have mango.
Oh. What flavours do you have?
Strawberry, vanilla and chocolate. (Always in stock)!
OK. Can I have strawberry and vanilla please?
Yeah! You want a flake?
You want sprinkles?
Ok. (Proceeds to pretend to make the ice cream complete with sound effects). Here you go Mummy. £1 please.
Thank you Marley. Oh my… I think this is the best ice cream I have ever had!
We have to act this out over and over, switching between who is buying and who is selling.
Learning time: 5-10 minutes
5. Coin recognition
Just like Marley is learning to recognise numbers, letters, shapes, objects and patterns, he’s learning what each coin is. I have just put together a coin set - 1p, 2p, 5p, 10p, 20p, 50p, £1 and £2. We simply play games like colours, sizes, shapes, hide and seek and shops to help him recognise and name all the coins.
As he gets more confident I will encourage him to find the right coins in my purse for small purchases. This will set the foundation for understanding that the values of these coins are different. Later, when he’s mastered coins and when I can trust him not to rip, scrumple, hide or draw on notes (!), I’ll bring in note recognition.
Learning time: 2-5 minutes
6. Purse play
I’ve let Marley play with my purse forever.
At first he nibbled it and flicked the zip.
One day I opened it and handed him what he could play with. Store reward cards were all the rage at this stage!
One day he was able to pop open my purse himself. At this stage I let him explore freely once I had rescued anything he could damage. He pulled out bank cards, reward cards, receipts and squiggled shopping lists, sometimes attempting to stuff them back in the wrong places, but usually leaving a huge mess on the floor! (It’s surprising how much comes out of one's purse and I often used these moments to declutter my purse).
Finally, he was able to unzip the coin side of my purse and this brought as much joy as his much loved, but very messy, stash of buttons.
Throughout all of this, even before he could obviously understand what I was saying, I told him what everything was, explained names, colours, textures, uses and generally chatted through money stuff that has probably been far beyond his understanding!
At this stage, purse play has given Marley and I numerous opportunities to talk and learn about money related objects. No doubt these often spontaneous, sometimes life saving, boredom solving purse play sessions, (think waiting with a young child - eek) have also given Marley opportunities to develop his fine motor (dexterity) and problem solving skills (taking things out and putting them back).
Learning time: 2-5 minutes
7. Give them a purse/wallet
After all that play time with my purse, I’m about to buy Marley a wallet so that he has somewhere safe to put his money when we are out and about. This way, he can start to take ownership of his money and learn to use his wallet to pay for things, especially as his knowledge of coin values gets better. There are some cool chain link children's wallets that can be attached to their clothing to avoid the almost inevitable lost wallet scenario that results from short attention spans and lack of concentration!
8. Savings jar activities
Right now, Marley puts any coins that he is given or ‘earns’, in his red bus savings jar. The act of putting coins he has received in there is teaching him that they have a value. They are special and not to be lost. He also loves slotting them into the tiny hole and hearing the inevitable clang!
Every now and then he gets to tip his coins out, toss them, roll them, build money towers, learn to sort and count them and then clang them back into his red bus (as pictured with Daddy). He finds this activity a lot of fun!
In time we will probably introduce Dave Ramsey’s spend, save and give jars recommended for age 4 and up. In time, we will take his coins to the bank and show him how we convert them to a money value in his online savings account.
Learning time: 1-15 minutes
As I have embraced gratitude practices in my own life, I have noticed how much more I appreciate what I have right now - the people, the things, the events, the experiences, the now. For me, more gratitude has correlated with more happiness, appreciation and satisfaction.
I want to pass the benefits of gratitude on to my children but gratitude is a big word and a big concept! So I simplified it. Every night as I tuck my little man into bed, I ask, “What was your favourite thing about today?”
I’ve had answers like,
Playing with bubbles / hose pipe / cars
Playing with [insert name of parent, friend or relative]
Playing chase / hide and seek
Eating ice cream
We then have a wonderful chat about whatever he brings up. I love listening to him share his experiences and watching him relive the joy. At some point in the conversation I will say, “So you are grateful for X, because X? He will usually agree with, just listen to my summary or get distracted! For example, picking the swimming example, based on what he expresses, I will summarise what he has told me. “So you are grateful for swimming because it was so much fun jumping into the pool and splashing with Daddy”.
This simple daily practice is planting a gratitude habit in him, plus he goes to sleep fuelled with positive, happy thoughts which can only be good for him.
Learning time: 1-3 minutes
10. Act and speak by example
I am always struck by how quickly babies and toddlers learn. I can see words and traits that Marley has already picked up from hubby and I I am proud to say that Marley already objects to litter, shouting and being unkind to animals - three things I can clearly see we have been involved in teaching him.
We are so very conscious that we are the biggest influences on Marley, so it’s incredibly important that we reflect what we want to see in him.
When it comes to money I feel I have a long way to go before I can be proud of the legacy I leave Marley, but what I can do is teach him what I am learning. Here are some ways we are leading by example.
We don’t drag him round the shops because the last thing we want him to learn is numbing, mindless, debt inducing ‘retail therapy’.
We do involve him in practical shopping like food shops (online and offline), buying fuel for the car and necessary preplanned shopping that involves going to specific places for specific things.
We involve him in deliveries of online purchases, explaining why we bought things, how we got them and where they came from.
Hubby and I have very different money blueprints and financial journeys, something we have been known to clash on. We have had many an ugly argument about money but are progressing from ugly to heated discussions! We choose not to have these around Marley because they are beyond his understanding and I believe he needs to see his parents in unity (certainly at this stage of his life).
We watch our language, avoiding expressions like
We can’t afford it...
If only I could win the lottery…
Money doesn’t grow on trees…
You can’t have everything you want…
Rich people are...
We keep a watchful eye on our habits in the hope we can spot things we need to improve, so we can adjust where necessary and only pass on the good.
My top tips for teaching 2 year olds about money
Obviously, teaching a two year old about money has to be taken lightly. Here are my 4 top tips for parents wanting to teach their two years old about money.
Keep it short and sweet
At this age, we are working with very short attention spans! I don’t force Marley back to the topic when he inevitably gets distracted and clearly wants to move on and do something else. I take this approach with all learning because life at age two should have learning through play at its core. At age two, Marley should be floating from one whimsical and enchanting adventure to the next!
Don’t do everything at once. I’ve pulled together all the ways I have found to introduce money lessons for my two year old. That doesn’t mean I do all these things at once! In fact, when opportunities arise, we probably spend up to 5 minutes on the topic, if that. I have put learning times against relevant activities listed above to illustrate just how short these lessons are at this stage.
I’m not talking about swapping their bedtime stories for books on money mindset theories and financial planning! I am talking about introducing simple money concepts early, and making them super fun. Dave Ramsey calls these ‘teachable moments’. The clue is in the word moment. These are tiny little opportunities that we can use to teach our children about invaluable money lessons.
Don’t worry too much if things don’t go to plan. If your two year old doesn’t get it, that is ok! They may be taking in more than you give them credit for, and you can always adapt your approach to make it more suitable to your child's needs. You can always accommodate what you have learned next time the same learning opportunity comes up.
We’re having a lot of fun playing with and learning about money (and a whole myriad of other topics)! Start early because you are planting tiny seeds that form the foundation for future lessons, experiments and real life application in money. If you don’t teach your children about money, who will?