This article was originally printed in the September/October 2025 issue of ‘hood Magazine. To see this article in print, and to read the rest of the issue, check out our digital issue.

By: Sarah Kurtenbach 

A friend once told me, “My kids think I have a magic card that just buys everything—food, clothes, toys, you name it!” She was frustrated, but honestly? It’s not surprising. No one is born knowing how money works. It’s a skill we have to teach – and teaching it early is a massive win. 

When our children turned two, my husband and I created a simple 3-step system to help build healthy money habits. Now that our kids are four and six, we’ve seen this approach lay a strong foundation for financial confidence. 

Step 1: Money Comes From Work 

Even toddlers can begin to grasp that money doesn’t come from a magic card or fall from the sky (thanks for the one-liners, Grandma!). We reinforce this through everyday moments, like saying: 

“Do you know how we buy these shoes? Mommy and Daddy go to work to earn money!” 

As they grow, we’ll introduce concepts like investing and compound growth. But for now, simply knowing that money is earned through work is a huge win. 

Step 2: Use the 3-Jar System — Save, Spend, Give 

When toddlers receive money (especially after helping out or completing a chore), we show them how to split it into three jars: 

  • Save – 50% 
  • Spend – 40% 
  • Give – 10% 

Tip: Use clear jars so they can see their money grow. It’s a fun and visual way to introduce budgeting and the idea that not all money is for spending. 

Step 3: Make It Real 

Let them experience their money! Toddlers love hands-on learning, so try this: 

  • Take their “spend” money to the Dollar Store for a fun shopping trip. 
  • Visit the bank and let them hand their “save” money to the teller (bonus: open a high-yield savings account!). 
  • Let them drop their “give” money into the offering box at church or buy something kind for someone in need. 

Real-life practice makes the concept of money more meaningful – and memorable. 

Will this take effort and consistency? Absolutely. But raising kids who understand real-world money (instead of believing in “magic money cards”) is one of the greatest investments you can make. 

Sarah is a local mom of two who knows a thing or two about financial literacy. She is the founder of moveHER Money, where she teaches girls how to be financially savvy.