7 Money Lessons Kids Can Learn From the Tooth Fairy


My first visit from the Tooth Fairy is my first specific memory of holding money in my hand. I ran to my parents bedroom excitedly exclaiming, "I got a quarter!"

"Actually," my sleepy dad told me, "You got a 50-cent piece. That's worth two quarters."

I know firsthand that kids can learn a lot about money from the Tooth Fairy, since I did. I also know that my own kids have been able to learn some valuable money lessons based on the under-the-pillow payouts that they've received.

1. The values of different coins and bills

Like my father before me, I like to provide my kids with unusual coinage when they lose a tooth. My thought was that it makes it seem more magical if they receive a denomination that they never see otherwise. So my husband and I have always slipped Sacagawea golden dollars under their pillows.

The funny thing is, for years my oldest child hoarded these coins in her room and never spent one. One day she was gathering up all her money and was frustrated that she didn't have enough to buy something. I suggested she raid her trove of tooth money, and she told me that those weren't "real money." We had neglected to tell her that golden dollars were legally accepted currency, and she had gone years thinking that she was exchanging her teeth for mere trinkets.

Besides using it as an opportunity to introduce unusual coins, you could use the Tooth Fairy's visit as a lesson by alternating between different combinations of coins, so they learn that four quarters equal ten dimes which equal 20 nickels. But good luck slipping 20 nickels under the pillow without waking them up! (See also: 21 Things You Should Make Your Kids Pay For)

2. How to handle a windfall

As an adult, handling a surprise influx of cash can be one of our tougher decisions. It's always tempting to see a windfall as license to spend freely, but then again, a wisely invested windfall could have a vastly different effect on your life than one you decided to blow.

If allowance is a kids' "salary," Tooth Fairy money is analogous to a tax refund or a Christmas bonus. Let them decide how and whether to spend it, and watch them learn.

3. How to make sure you're getting paid fairly

Just like sharp-eyed employees at a company, my kids pay attention to what the Fairy pays their siblings. If someone gets more, they do not fail to speak up about it, and the Tooth Fairy seems to get the message, because future payments tend to be more equal. My kids have also had some success in investigating market rates by asking friends how much they get. Once they reported to me that other friends got more money for top teeth, for example, the Fairy started paying a premium for those as well. Lesson learned: It pays to do your research and demand equal pay. (See also: 4 Parenting Mistakes to Avoid When Teaching Kids About Money)

4. Sometimes money doesn't show up when you expect

As a freelance writer, I know the excitement of hearing the mail carrier approach my door, followed by the disappointment of seeing a pile of bills and no checks coming through the slot. Many children will at some point wake up to find that the Tooth Fairy forgot to come. According to a report by Delta Dental, more than half the parents surveyed at some point forgot to leave money under the pillow — which gives children an opportunity to practice their patience and learn that sometimes you have to wait longer than you expected to get paid.

5. The spending power of money

Just like me with my 50-cent piece, most little children have no idea what their first Tooth Fairy payout can buy. Take them to the store and let them shop. Next time, they'll have a more concrete understanding of what 50 cents or a few dollars is worth. This will help them better budget their allowance once they start earning one. (See also: The Easy Way to Set an Allowance That Won't Ruin Your Kid)

6. How to forecast future earnings

Most kids lose their first few teeth in kindergarten, at an age when thinking about the future at all is a challenge. As they get older, kids may realize that they can count on a payout every time they lose a tooth. Really canny ones may even consult a medical text or ask their dentist how many more baby teeth they have to lose so they can figure out how much they've got coming to them.

7. No pain, no gain

Sometimes one of my kids will let a loose tooth dangle by a thread for days because they're afraid of the small amount of pain that might happen if they pull at it. When this happens, sometimes one of the other kids will comfort them by reminding them that they'll get money once the tooth finally comes out. Sometimes it's just the push they need to face the pain.

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