You cant, you can only add wonderfuls to make your tools better, the tools you get for free cant hold any wonderfuls, you need to buy a better tool from Gannon, the slot amount is 2+yr you are in, so in year 1 the best tool he can sell has 3 slots, which costs 3000, which lets you put 3 wonderfuls in the tool, chen sells 3 wonderfuls to start, you win 1 for winning a festival.
Wizard's First Rule: People are stupid; given proper motivation, almost anyone will believe almost anything.
Chen will sell a Blue, Red, and Yellow wonderful during your first year. Just one though. To equip them, talk to his son Charlie when he is also in the store. And make sure that your tool has enough slots, if it doesn't, but one from Ganon that does