Concepts of money can be introduced very early, provided your toddler is more interested in holding or counting coins, rather than tasting them! Start with the basics. Let your child have the change from your purse or pocket to put into the family piggy bank. When possible, have your child count the money with you. Sort the money by coins, talk about the value of each coin and how they relate—5 pennies is the same amount as 1 nickel.
Explain the concept that some money is set aside for saving, some is left available for spending, some is put away for donating to help others who do not have money, and some is for the “college fund,” and other investments, or big things you may need one day. Don’t worry about some of the concepts seeming above level. They will catch up.
Be sure to CONNECT the money that you earned with your job, and that money doesn’t grow on trees, but rather than you earned it by working hard that week. Ask your child if she or he is ready to work too, by helping around the house, setting the table, helping with laundry, cleaning up around the house or other age-appropriate tasks.
When the time is right, give your child his or her own piggy bank. Continue the ritual of counting the money you received and start a budget with them. Each week, 25% is for spending, 25% is for saving, 25% is for donating and 25% is for investing. Vary the percentages to whatever amount you think makes sense.