My toddler (3) started this a few months ago and I know exactly why, it's because she sees ME doing it. I am a pretty easygoing parent but this is one thing where I get on her right away to stop because it is such a hard, hard habit to break once it's ingrained. It's seriously the single biggest thing I wish my own parents had really cracked down on when I was little. Yes, anxiety almost certainly plays a role. I have anxiety and can see it in my toddler. But there are other outlets for anxiety like fidgeting, hair twirling, than the nail biting which is such a terrible habit.
Anyway, me and DH saying gently but firmly, "NO nail biting" whenever we see her doing it, and taking her hand away from her mouth if necessary, seems to be working. She also seems to enjoy turning around and saying, "NO, Mommy!" to me when I unconsciously do it, so perhaps a silver lining will be that my kid can do for me what my parents and I myself have not been able to, LOL.
Painting nails might work but I will say for me as a kid, all that would happen is the minute it chipped it would drive me nuts and I'd work away at it. I have probably ingested bottles of nail polish in my lifetime. (Sorry, I know that's gross.) I think distraction is key especially at that young age.
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