Questions to Ask Your Kids About Money

Erin OsterhausFebruary 22, 2023


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There’s no getting around it—kids are curious. They ask questions about everything: Why is the sky blue? Where do babies come from? What is the meaning of life?

Big questions that demand big answers. But believe it or not—it’s questions about finance that tend to make parents the most uncomfortable. In fact, the majority of Americans consider talking about money a taboo, and that extends to talking about money with their kids.

However, talking to your kids early and often about money and finances allows them to make smarter money decisions later on in life. By engaging with your children in conversations about what money is, how it works, and how your family uses it, you can help them shape a healthy and productive relationship spending and saving that will undoubtedly help them be more successful later in life.

While your kids probably have plenty of questions for you, you might jumpstart your talks around finances with a few questions of your own. Not only is it often entertaining to see how your kids will answer these questions, but it can also serve as a useful teaching moment.

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What Is Money?

This is a basic question, but it is one that can result in a huge variety of answers. Your kids will probably tell you that money is those green bills and different sized coins—or maybe just the pieces of plastic—that you pull out of your wallet every time you go to pay at the cash register at a store. While those answers are more or less correct, you can use this question to introduce the concept of how you can use what may seem like worthless pieces of paper and plastic in and of themselves to convert them into things your family needs. This question is also a good way to get kids thinking about money more broadly and engage them in further conversation.

Where Does Money Come From?

Another good conversation starter, asking your kids where money comes from can help them understand why it is valuable and how it is earned. At first, they might just tell you that money comes from an ATM and believe that you have access to an unlimited supply.

With this question, you can explain to them in a way they understand that money is limited. For instance, if your child keeps a piggy bank, you can compare the ATM to their small savings supply. With a piggy bank, they can’t take out more money than they’ve put in. The same goes for ATMs and other grown-up financial accounts. And because that supply is limited, you have to be careful in how much you take out to pay for things your family needs, like clothing and food.

What Are Wants and Needs?

Once you’ve set the foundations and established what money is and where it comes from at a basic level, another great question to lead your kids down the path to financial security is to ask them about the difference between wants and needs. These basic concepts are essential to understanding more complicated topics like budgeting and saving. You might be surprised at how quickly they’re able to explain the difference between the two—namely that a need is something you can’t live without like food, shelter, and clothes, while wants are the fun things like candy, toys, and vacations.

What Is a Budget?

Because money is not limitless, making decisions about what to eat, what to wear, or what activity to do is a crucial skill to have when it comes to managing money. After all, you can’t buy everything, so fostering smart decision-making in children will make their financial lives as adults much healthier.

As such, asking them what a budget is can be a great way to turn the daily decision between this toy or that toy, one mango or two apples, into a broader discussion about how you can manage the limited resources you do have to acquire the things you need most. By explaining that buying a more expensive item leaves less money for something else they may want, you can introduce the idea of financial planning, leading into another important concept for kids when it comes to financial literacy: saving.

Why Should You Save Money?

Familiarizing kids with the idea of saving early on is a crucial step in any financial education. Asking them why they should save money will encourage them to think about the different scenarios in which saving money makes sense. For instance, one of the first reasons they might list is that saving money now will allow them to buy something later that they can’t currently afford.

You can build on any insight they provide with concrete examples from daily life. If they want to buy a video game that costs $50 and they earn $5 per week for their allowance, do the math with them to determine how long it will take them to reach their goal.

What Would You Do with Money?

This last question can help your kids pull together all the concepts they’ve learned about money’s finite supply and the importance of budgeting and saving. At the very least, you’ll probably get some quality entertainment from hearing your child’s plans for their future earnings. Kids have amazing imaginations and it’s unlikely they’ll tell you something as sensible (and boring) as “saving for retirement”.

If your family lifestyle and budget allow for it, this might be a great way to talk about allowances!

Keep the Conversation Going

Whatever your children respond to any of these questions, allow them to make mistakes with their money. Keep the conversation about money going and encourage your children to keep thinking about how it can be a positive force in their lives. The point to emphasize is simple: with good management, they can use money as a tool to buy the things they want and reach non-monetary goals as well, like stability, security, and peace of mind.

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Erin Osterhaus

Erin is a personal finance writer based in Austin, Texas. Her work has been featured on TechRepublic, Yahoo Small Business, and She’s been passionate about helping others manage their money since she successfully paid off $60,000 in student loans in four years. When she’s not writing, Erin loves reading, studying languages, and spending time with her family.