How to Answer the Top 5 Questions Kids Ask About Money

Kids can ask some challenging questions when it comes to money and finances. Although these questions might be uncomfortable, your child’s curiosity opens the door for a discussion that can set the stage for good financial habits. Rather than avoiding these questions or providing a general response, take the opportunity to connect the dots between their inquiry and your family’s finances. To prepare you for these conversations, we developed a list of the top five questions kids ask about money and suggestions on how to answer them.

1. How much money do you make?

You do not need to disclose an income number in order to answer this question. In fact, young children will likely not be able to understand the difference between a salary of $60,000 and $160,000. Instead, you should use this as an opportunity to educate your children on how your salary is enough to pay for your family’s fixed expenses such as healthcare, housing, food, utility bills, etc. You can use a stack of play money to show how your monthly take-home pay covers monthly expenses and remaining funds are saved for future needs. 

2. Are we rich?


The best way to tackle this question is with a follow-up – “Why do you ask?” This approach not only gives you a few minutes to collect your thoughts, but also provides a better understanding of what led your child to ask the question. This can also lead to a discussion on what it means to be “rich.” Explain that although there will always be people that have more or less money, being “rich” is about having the things you need and being happy, healthy and grateful.

3. Why can’t I buy what I want?


This is a great time to teach your kids about the difference between wants and needs and the importance of creating a budget. Depending on your child’s age, you can start to include your child in the discussions about family finances. If your child wants something specific such as a bicycle, you can help them create a budget to manage how much of their allowance or earnings they should save, and how much should go toward the cost of the desired item.  

4. Doesn’t money come from the ATM?

Think about a trip to the ATM from a kid’s perspective. Mom or dad inserts a plastic card into the machine and money comes out! It’s easy to understand why children would think if you need more money, you just go to the ATM. The most basic lesson to teach children about using an ATM is that the money you withdraw is the money you have earned from your job and have previously deposited into an account with the bank. Explain that a bank stores your money to keep it safe and you access it through the ATM for convenience. Take your kids into the bank to involve them in a transaction to help them understand this process or show they how you review account information online.

5. Why can’t we go on vacation like Becky’s family?


It’s common for kids to compare what they have – toys, homes, cars, vacations – with their friends and ask some variation of the question “why does someone else have more or less than we do?” It’s important to explain that families spend their money differently depending on what they need and value most. You can also help your child understand how much it costs to go on vacation and how long your family needs to save for a trip.

Having open conversations with your children about money will provide reassurance and help teach them healthy financial behaviors.

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