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Dad What Is Money? Have you ever been asked such a simple question and struggled to answer it? Check out how I answered my 5 year old when he asked me

Dad… What is Money?

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“Dad, what is money?” my 5-year-old son asked me on a bright summer afternoon as I sat in the yard. Catching me totally off guard from the daydream I was having about travelling in Europe again.


I stared at him for a second.


“Crap. I don’t know…” I thought to myself.


I mean… I do know money. I use it, earn it, spend it, save it, find it and lose it.


I have a fondness of money, not the kind of do-anything-to-get-more-of-it mentality, but I do really like money.


What should I say?


My Parenting Fears Summed Up In 1 Thought


My mind flashed forward 20 years into the future. I envisioned my son in some kind of Jerry Springer-like TV show setting. He was on stage being interviewed and telling the Jerry Springer moderator:


“Well Jerry, it all started when I asked my dad about money…”


As a parent, this is a fear we have, it goes something like:


“God help me, I don’t want to break/ruin my child.”


It’s something that goes through many parents mind a hundred times a day. I call it the “Good Parent Curse”. Those times when we immediately know when we do wrong and rarely recognize when we do good by our kids.


I stared at my son and deflected the question in the only way I could think of, trying to buy myself some time.


“Why do you want to know?” I said.


I figured this would buy me a little time. I’ve been a student of money my entire life. I have been burdened by debt and elated by windfalls (aka finding $20 bill in a winter jacket). This should be an easy answer.

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Yet still, staring at my eagerly awaiting son, I had no clue how to explain money to someone his age.


“Well, I just wanna know.” he quickly responded.


So much for buying time. One thing you will find with kids at a young age, they know what they want. Although they can rarely articulate the reason why they want it.


What Should I Say?

Father and Son Lake Louise

Do I say: “It’s what people use to buy things”?


It’s simple and true. But would this lead him down a path of materiality? Always believing that if you have things, it meant you had money.


That’s the last thing I want.


I didn’t want my son going down the path of materiality. We get so stuck in the visual world of flashy possessions that we never think of the debt that is behind the purchase.


Do I say: “It’s something you work for”?


Again it’s true. Then the argument immediately popped up in my head “Well that could tie him to a life of working for money.”


I know we all work for a living. I just didn’t want him to go to work exclusively for money. But what if I could set him on a path towards a different end that you don’t work for money, but for fulfilment and satisfaction instead. That might be better.


As a parent, you are an educator to your kids, often by example, and the idea of tying work to money at such a young age didn’t sit well with me for some reason.


Do I say: “Money is an idea”?


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I think I read that in a Robert Kiyosaki Rich Dad books. It’s a great line, but for a 5-year-old it’s just going to leave him more confused.


Finally (ok, it’s more like 3 seconds, but trust me it felt a lot longer) I looked at my patiently waiting blue eyed son and said:


“Money is something you can use to buy things, you can save it, and it’s very important, it’s a skill that you need to learn.”


“Money is a skill?” He asked. “Like skating?”


“Yes, it’s a skill. Just like skating or walking. No one is born knowing about money, or walking, or skating, it’s something you have to learn. If you can master money you will be much better off.” I replied.


I thought it was best to set him up knowing that money was just a thing, but a tool, something that you learn about and can use to do many things.


One More Thing About Money


“There’s one more thing,” I said, feeling like I needed to get this last point in, to avoid a future Springer-type scenario, “as important as money is in life. It’s not the most important thing.”


“What is the most important thing dad?” my son said.


“Happiness my son, happiness. Here’s the thing, (fully knowing that part, if not all, of what I said was going over his head) if you have a lot of money you aren’t guaranteed to be happy. But if you don’t have enough money, then you will always worry about money and never be happy either. Work on happiness, and I can help you with the learning about money part the best that I can.”

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“How do I get good with money?” my son asked me, looking more confused than ever.


“The only way to get good with money son is to start handling it. I think it’s time you and your sister start to earn an allowance”


Next time, I’ll share with you how we are handling our kids’ allowances. Make sure to sign up for our newsletter so you don’t miss out.


How would you handle explaining to your kids what money is?

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  1. Reply

    Its great that your son at five is asking. Never an easy question. I lead by example with my three and involve them in our budget discussions. Also taking to them about things they are interested in and weaving money into is another good way to go. Good luck!

    • Reply

      It really isn’t an easy question. It sounds like it should be so simple until you realize you are explaining it someone who needs it broken down and very plainly defined. I like the idea of weaving money into stories, thanks for that Brian!

  2. Reply

    Very sweet article. Thank you for sharing. Although my boys are 17 and 18 now, I can imagine myself easily handling their 5 year-old questions is similar fashion. Although you don’t want to force it, keeping the conversation going about money over time is important knowledge for any parent to pass down to their children. You know, to keep them off the Springer show!

    • Reply

      Thank you! Exactly it’s about always keeping the conversation open so that they know they can talk to you about money whenever they need to. I still call my dad and say “So I’m thinking of doing this with my money… what do you think” I know I will always get a good answer and talk out of it. Needless to say I never went on Springer.

  3. Reply

    Why not go directly with the money-time-energy relativity equation? 🙂

    I don’t think it’s so hard to get for a kid.

    Money is something you trade your energy for, that allows you to get something from.

  4. Reply

    My son asked me a variant of this question when he learned that banks have all the money and if you don’t have any, just go to any bank and they will give you some. I used this opportunity to teach him deposit and withdrawal and simple interest, Now, at 10, he has has his own bank account and keeps asking me if his ‘interest’ is going up. 😄

    • Reply

      That is awesome. I know with my kids whenever we go to an ATM they think it’s a magical box that gives you money. I make sure they know, daddy has to put the money in before he can take it out.

  5. Reply

    This was so sweet to read. 🙂 I’m sure you’re an amazing father! Money lessons start early–it’s all about defining and understanding financial concepts. I love that you didn’t focus on “money is what we use to buy lots and lots of stuff” because that’s not always true. Well done!

    • Reply

      Thank you for such kind words, as much as I love to write about money, talking to someone who is learning to tie their shoes about money is a challenge. You’re so kind!

  6. Reply

    I also suffer from the “curse”. Every little mistake I make as father I imagine amplified 10-fold over the course of him growing up.

    Thanks for this article! My kid just turned three and isn’t asking about money yet, but this helps give me a dress rehearsal for what I plan to say.

    • Reply

      Thanks for the comment Adam. It’s so funny how you think you known money until you have to break it down to a little one. It’s like trying to describe the colour green to a bling person. Good luck with your little one when they ask

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