How to Answer 'Are We Rich?' When Your Child Asks About Money

Your child looks up at you in the grocery store and asks a question that can catch any parent off guard:

Are we rich?

Or maybe it happens when a friend shows off a new toy. Or when they notice the neighbour's bigger house. Or when they overhear you discussing bills.

The question feels loaded. Answer wrong and you risk creating entitlement. Answer differently and you might plant seeds of shame or scarcity. So what do you say?

I faced versions of this question hundreds of times during my years in private banking. I watched high-net-worth families navigate this conversation with their children, and I saw what worked and what failed spectacularly. Now, as I build financial optionality for my daughter Ebba, I think about this question differently than I did on the trading floor.

Your answer to Are we rich? teaches your child how to think about wealth for the rest of their life.

A young girl deep in thought, contemplating her next words against a serene blue background.

Why Children Ask 'Are We Rich?' Why This Matters More Than You Think

Children are not asking for a bank statement when they ask if you are rich. They are trying to understand their place in the world. They are noticing differences between families and trying to make sense of what those differences mean.

The question usually comes from one of three places. Sometimes they are comparing themselves to friends. Sometimes they are worried because they overheard you stress about money. Sometimes they genuinely want to understand how your family works.

I had a client who avoided this conversation entirely. He built significant wealth through private equity but refused to discuss finances with his adult children. He believes he is protecting them from entitlement. One day when his children inherit the wealth they will have no idea how to manage it. They do not understand the family business structure, the investment strategy, or even the basic values behind the wealth.

On the other end, I watched a family navigate this beautifully. From young ages, the children understood the family had resources, but they also understood that wealth came with responsibility. They knew what their parents valued and why. They learned that having money did not make them better than others, just luckier in some ways. Those children grew up grounded, grateful, and financially capable.

The difference was not how much money the families had. The difference was how they talked about it.

The Framework That Actually Works

Start by turning the question back to your child. Ask them: 'What do you think it means to be rich?'

This is not a deflection. This is valuable information. Your child's answer tells you what triggered the question and what they are really asking about.

• If they say rich means having a big house and fancy cars, they are comparing possessions.

• If they say rich means never worrying about money, they overheard adult stress.

• If they say rich means you can buy whatever you want, they are testing boundaries around wants versus needs.

Once you understand what they mean, you can address what they actually need to hear.

A Script That Balances Honesty and Values

This is the framework I recommend, adapted to your family's actual situation:

'We are richer than some families and poorer than others. We have enough money to take care of what we need: our home, food, clothes, and health. We also have some money for things we want, like activities and occasional treats. But we make choices about how we spend because money is not unlimited for anyone.'

Then add the part that matters most:

'Being rich is not just about money. Real wealth includes being healthy, having people who love you, learning new things, and being grateful for what you have. Some people have lots of money but no health to enjoy it. Some people have both. Some people have less money but rich lives in other ways. We focus on building all kinds of wealth in our family.'

This answer does three critical things. First, it acknowledges reality without oversharing numbers. Second, it introduces the concept that wealth exists on a spectrum. Third, it expands the definition of wealth beyond dollars.

How Wealthy Families Talk to Their Children About Money

During my time managing portfolios for high-net-worth clients, I noticed the healthiest family relationships around money shared common elements.

The families who raised grounded, capable children were honest about having resources. They did not pretend to struggle when they did not. But they paired that honesty with clear values and expectations.

One client family had three generations actively involved in real estate development. The children grew up knowing the family had significant wealth, but they also grew up working in the family business during summers. They attended family meetings where investments were discussed. By the time they were teenagers, they understood how wealth was created, protected, and deployed. They saw it as responsibility, not just privilege.

Another client made a different choice that backfired. He wanted his children to stay motivated, so he hid the extent of the family's wealth. The children had no idea their trust funds existed until their father's sudden death. The shock of discovering they were financially set for life, without any preparation or education, created years of confusion and poor decisions. The lack of preparation hurt them.

The lesson is not that you need millions to have these conversations. The lesson is that children need context appropriate to their age and your situation, not secrecy or false narratives.

How to Answer Money Questions Based on Your Child’s Age

What you say when your child is five will sound different than what you say when they are fifteen.

• For young children (ages 3-7), keep it concrete. We have enough money to buy groceries and keep our home safe and warm. We do not have enough money to buy everything we want, so we make choices. They do not need percentages or comparisons yet. They need to understand that money is finite and decisions matter.

• For middle childhood (ages 8-12), you can introduce relative thinking. Some families have more money than we do, and some have less. We have enough to take care of our needs and some of our wants. That makes us luckier than many people.

• For teenagers, you can be more specific if the situation calls for it. We are in the middle range for our neighbourhood or We save a percentage of what we earn for your education and our future or We are comfortable, but we live within our means.

  Teens can handle nuance and benefit from seeing how adults make financial trade-offs.

The key at every age is pairing information with values. Do not just tell them where you stand financially. Tell them why you make the choices you make and what you hope to teach them.

The Bigger Definition of Wealth

In my upcoming book I am writing for Ebba, wealth comes from many sources beyond money. The main character learns that true wealth includes health, safety, knowledge, gratitude, and strong relationships.

This is not a fairy tale for children. This is how wealth actually works.

I watched this in real time during the March 2020 market crash. Some clients had millions but panicked and sold everything, locking in losses because they lacked the emotional discipline to stay invested. Other clients understood market cycles, stayed calm, and actually bought more when prices dropped. When markets recovered, the disciplined investors, regardless of starting wealth, came out ahead.

The difference was not money. The difference was knowledge, emotional control, and perspective. Those are forms of wealth too.

When your child asks if you are rich, it is an opportunity to expand their definition of wealth beyond what they see on screens or in stores.

You might say: We work on being rich in lots of ways. We are rich in health because we eat well and stay active. We are rich in learning because we read and try new things. We are rich in love because we have family and friends who care about us. And yes, we also work on being smart with money so we can take care of our needs and build security for the future.

This shifts the conversation from comparison to values.

What About When Money Actually Is Tight?

If your family is genuinely struggling, your child probably already senses it. Pretending everything is fine when it is not teaches them that money is shameful or secret.

You can be honest without burdening them with adult stress: Right now we are working hard to make sure we have enough for what we need. Money is tight, which means we have to make careful choices. But we are working on it, and we will be okay.

Then pivot to what they can control: You can help by taking care of your things so we do not have to replace them, and by understanding when we say no to extras right now. When you are older, you will learn how to earn, save, and invest so you have more options than we do now.

Children respect honesty delivered with reassurance. What damages them is either pretending nothing is wrong when they can feel something is, or overwhelming them with details they are too young to process.

The Question Behind the Question

Sometimes Are we rich? is not really about wealth at all.

It might be Am I safe? when they overhear you arguing about bills. It might be Why can't I have what my friend has? when they feel left out. It might be Do you think I am spoiled? when they are testing what you value.

Listen for the real question. Address what they actually need to hear.

• If they are worried about safety, reassure them: We have enough for what matters. You are safe.

• If they are comparing themselves to peers, teach them about choices: Every family decides what is important to them. Some spend more on toys, some on travel, some on saving. We choose what fits our values.

• If they are testing boundaries, hold firm: Having money does not mean spending it on everything. We think about what we really need.

The conversation teaches more than the answer.

What Happens When You Get This Right

When families navigate wealth conversations well, children grow up with a healthy relationship to money. They understand it is a tool, not an identity. They know the difference between needs and wants. They develop gratitude for what they have instead of resentment for what they lack. They learn that wealth is built through discipline and smart choices, not luck or entitlement.

I am building this foundation for Ebba through multiple channels. Yes, I am investing for her financial future. You can read about why I believe in starting from birth in my post on age-by-age money milestones. But I am also teaching her five languages to give her cultural and professional optionality. I am building this platform to show her how ideas become businesses. I am modelling financial discipline and long-term thinking every day.

When she is old enough to ask Are we rich? I will tell her the truth:

We are building wealth in many forms. We have enough money to be secure and comfortable. We are rich in learning because you are growing up multilingual. We are rich in opportunity because we are giving you choices for your future. And we are teaching you how money works so you can build your own wealth when you grow up.

She will understand that wealth is not something you have or do not have. Wealth is something you build, protect, and use wisely across many dimensions of life.

FAQ: Talking to Kids About Family Wealth

Is it bad to tell kids you are rich? It is not about using the word rich. It is about pairing honesty with responsibility and values.

Should parents tell children exactly how much money they have? Exact numbers are rarely helpful for young children. Context and principles matter more.

What if my child feels poor compared to friends? Acknowledge their feelings, then explain that families make different choices based on values.

At what age should kids understand family finances? Children can understand simple concepts early, with complexity increasing as they grow.

How do you avoid raising entitled kids? By connecting money to effort, limits, and gratitude, not secrecy or guilt.

Your Next Steps

The next time your child asks about money, pause before answering. Ask yourself what they are really asking. Give them an honest answer that fits their age and your values. Use the moment to teach, not deflect.

If you want a practical framework for talking to your kids about money at different ages, read my post on Age-by-Age Money Milestones. If you are ready to start building financial optionality for your children, explore the compound interest calculator to see what small, consistent investments can become over 18-20 years.

And if you need a reminder that wealth includes more than your bank balance, check out Ebba's Picks: I write about books like Dracula and Animal Farm through the lens of financial lessons, including the deeper truth that self-control, awareness, and discipline compound just like money.

About Learn With Ebba

Learn With Ebba helps families build financial confidence on the path to financial independence, starting from childhood. I translate wealth management principles from my 15+ years in private banking into practical guidance any family can use. The mission is simple: if you invest consistently for your children from birth, by their twenties they can generate passive income to cover basic living costs, giving them options to choose what they want to do instead of taking jobs just to pay rent.

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