I have a serious dislike of those little cake watercolors intended for children, but I am not yet willing to let The Sage use my professional watercolor paints. So, my solution involves a plastic tray with 9 indentions that my mom found somewhere (a plastic egg carton could work or different little take out salad dressing containers or the tiny play dough containers) and tempera paint. Pour each color of tempera paint into its own hole, then set it aside until it is dry. Now you have a toddler approved watercolor palette with lots more paint and bolder colors than the ones you buy. As the paint dries, it will shrink and probably crack, but that’s normal.
Since you’re making your own palette, customize it for your child- lots of orange and red paint for my kids, a multitude of pinks for others. You can also use seasonal colors, mix your own colors, make a palette of primary colors (red, yellow and blue) so they can mix their own, only warm or only cool colors, etc.