I Asked My Kids Some Questions on Sometimes Difficult Money Topics.

This is the 100th post published here on the Cash Dad!! I’m grateful to all you who have faithfully followed, read, and commented on my posts. I appreciate all the feedback I’ve received. It’s also a nice surprise to hear from people I meet or know that they’ve read the blog. So stay with me, and we’ll aim for another 100!!

There are a lot of tough money questions out there. What percent should I put down on my first house? How much do I need to save for retirement? And as an adult some money topics can be difficult to understand. What percentage of your investments is spent on fees? And, how often should you rebalance your portfolio? And while I certainly don’t have all the answers, I thought it would be interesting to see what my kids thought. They are (at the time of this article) ages 8 and 11.

We have discussed a few of these topics at various times, so I wasn’t exactly sure what would stick and what they would remember. So instead of “dumbing down” the questions, I asked them some more-adult-like money questions just to see what their responses would be. As you read through these questions and answers, think to yourself how you would answer the same questions.

My comments are between *** *** and in italics.

Why do we need money?

Kid 1 (11 yrs): To trade, because to get what we have, we would need money to act as the go-between.

Kid 2 (8 yrs): So we can have stuff to live like water and food and clothes.

What is debt? Is it bad or good or indifferent?

Kid 1 (11 yrs): Debt is a large or small sum of money that is owed to a person, place, or business. Debt is bad because instead of just paying for what you owe, you would add interest. So you end up paying for more than you bargained for.

Kid 2 (8 yrs): Debt is a bad thing. *** Okay . . . I wanted more here, but he wanted to do something else. ***

Explain the concept of credit?

Kid 1 (11 yrs): The concept of credit is debt on a card but different than debt. Credit is a sum of money that is owed by you to a company. Each month the money adds up until you pay twice as much. So it’s better to pay credit card debt earlier rather than later.

Kid 2 (8 yrs): I think credit is bad. Credit is money that you don’t have immediately. *** Pretty good. ***

What does it mean to “invest in the market”?

Kid 1 (11 yrs): Investing in the market is buying stocks. It’s a certain way or strategy to gain money by a certain amount of time. Example: a stock for GE costs $95 a stock, and GE compliments you by giving a person with one stock $45 three times a year (obviously a good year) *** Obviously!! *** In a bad year, GE gives you $35 two times a year. *** Still seems like a good year to me. ***

Kid 2 (8 yrs): Think about what to do with your money.

Can you give me an example budget including housing, food, transportation costs, etc.?

Kid 1 (11yrs):

  • Salary – $85000
  • House Debt (150,000) – $30000 *** paid off house in 5 years!! Nice! ***
  • Food – $12000
  • Electricity – $15000
  • Water – $11000
  • Gas – $2000
  • Emergency Fund – $3000
  • Retirement – $5000

Kid 2 (8 yrs):

  • Food – $160
  • Transportation – $395
  • Water – $100
  • Clothes – $25 and under

*** Neither one of the kids accounted for taxes. Which is not surprising considering it’s a topic we haven’t talked about too much. Also, the younger kid must be living in his car. That’s a great way to save on rent and utilities. ***

If you had 1 million dollars, what would you do with it?

Kid 1 (11yrs): I would pay off debt (If I had any). Then buy a house (which I can’t). Buy a Lamborghini (I can’t drive). And then buy a mansion (If I had money left).

Kid 2 (8 yrs): Get Lego sets. *** He’s not living in his car . . . He’s living in his lego-built house. Ahh. I get it now. ***

How much money do you need to retire?

Kid 1 (11 yrs): $50,000 to $1 million. *** That’s quite the range there. ***

Kid 2 (8 yrs): About $250. *** So . . . I’m all set. *** Also, your expenses are low with a lego house. ***

If you lose your job, what’s the first thing you should do? Explain your answer.

Kid 1 (11 yrs): Start looking for another job online: thinking about what you previously did.

Kid 2 (8 yrs): Pay off your *** Lego? *** house.

How much does it cost to go out to eat? Explain your answer.

Kid 1 (11 yrs):

  • Average fast food for 5 people – $15
  • Nice restaurant for 5 people – $30 to $50 plus a $20 tip
  • Diner for 5 people – $40 to $80 plus a $20 tip

Kid 2 (8 yrs): It probably costs $85.

Closing Thoughts

There you have it. All the answers straight from the minds of some pretty bright kids. I can see that I have some work to do in a few of these areas, but they’re still young. . . right? The cost of going out to eat still seems like a mystery to them. Although the older one is at least in the ballpark . . . mostly. Diner food is more expensive than a nice restaurant????

But hopefully they have a good foundation on which to keep building some solid money concepts. I think they did pretty well.

What do your kids know about money? Why not ask them some of these money questions and see what they say. They might just surprise you.

If you ask them, let me know what they say. You can leave me a comment, or drop me an email at “thecashdad@gmail.com”

Thanks for reading and sharing.


Chris is the original Cash Dad. He's a father of 3 and a mechanical engineer by trade.

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