She and Ben had been saving up the money to repay his parents for the football tickets.
The envelope, labeled "Utah Utes Tickets", contained $1,060 and was placed on a counter as a reminder to deliver it to relatives.
The couple said they laughed it off and Leo is no longer allowed to help mom shred things.
Leo apparently sent the envelope through the shredder sometime when they weren't looking.More news: Vettel slams Verstappen for fateful Suzuka tangle
"I'm digging through the trash and she hollers and says, 'I found it, '" Ben Belnap said.
The mystery of more than $1,000 that disappeared from a Utah family was solved when they discovered the money in pieces in the home's shredder, and found the culprit was their 2-year-old son.
That's a fate that turned reality for Ben and Jackee Belnap when their 2-year-old son chose to have fun with the family shredder according to CBS affiliate CBS4Indy.
In shock, Jackee said the two "shuffled" through the shreds of paper for a few minutes in silence.More news: Melania Trump gives thumbs-up to Kavanaugh
"We pulled that money out on Sunday to go take it to pay for our season tickets", said Ben.
"Honestly in my heart, I said some day this is going to be really amusing", Ben agreed, adding that most parents only have to deal with their kids drawing on their walls. Laughter. Then some tears. Though it would have been a bit harsh on a 2-year-old kid, a couple from Utah seems to have left it a bit too late with their son.
Surprisingly, they may be able to salvage the ruined money after all - there's a USA government agency that specialises in mutilated cash. But they might eventually get the money back. However, if that even happens, getting the money might take up three years to return.
"I'm like, 'Well, this will make a great wedding story one day, '" she said.More news: Opera icon & ‘Barcelona’ singer Montserrat Caballe dies at 85