When they're little, it can be hard to say no when they ask for a new toy or treat with their sweet little smiles and budding vocabulary. But as they get older, the cuteness stops and the reality sets in: you're not made of money! Today, Parents Ask expert Elizabeth Pantley shares tips on ways to talk to your children about money.

Q:  My kids think I’m made of money! Every time I turn around they ask for a toy, a movie, pizza delivery or cash! How do I get them to stop treating me as their personal bank?

A:  When your child asks for new things or money, you sometimes say yes, sometimes say no, and sometimes complain loudly . . . and then say yes. As long as things continue in this haphazard way, your children will keep asking, because the process is working for THEM. In addition, handing out cash without any money lessons doesn’t help your children learn what they’ll need to know to become wise purchasers and savers.

It’s time to decide how you want the money issue to be resolved. Decide in advance how often you’ll eat out, rent movies, and buy new toys. Set your own budget for these things. Let your children know the new rules, and then follow through and be consistent. 

Setting an allowance plan is another great way to solve this problem Review your child’s money wants and needs and start paying a specific weekly or monthly allowance and then let them pay for movies, pizza and toys out of their own funds. Help your children create a budget and a spending plan, and resist the urge to spend your own money when asked.

Another option is to buy your children the things they need and let them earn or contribute towards the things they want. You can create extra household chores for this, such as car-washing or yard maintenance.

It’s wise to start teaching your child about cost and value. Let your child handle the payment to the cashier for lunch or at the store so that he can see the cash going away. Help him place a more accurate value on the things you typically pay for without comment by getting him involved in some money decisions. “Yes, I could give you five dollars to rent a movie. Or you could use it to cover part of the cost of the new CD that you want.”

If your child has a desire for something special— a new bike, a computer game, a guitar—don’t complain about his always wanting something. Don’t run out and buy it for him, either. Instead, sit down with him and validate his wish for new things; it’s normal and acceptable to want something special now and then. Tell him how much you will be willing to chip in (one half, one third, or one quarter) and help him formulate a plan to earn the rest. He’ll learn some valuable lessons: how to make a wise buying decision, how to save, how to control the desire for material things, how to choose which of those ‘wants’ to pursue and how to let the rest go. And after the purchase, because he’s been so personally involved, he’ll likely treat the item with joy and respect.