1. "Like most families, we have to watch what we spend and stick to a budget. I'd like to tell you more about ours."
Beginning at around age 8, children begin to understand that their parents really aren't made of money. Explaining the basics of your household budget instantly helps them grasp just how much goes toward necessities—the mortgage, groceries, gas and clothing—and how little is left for luxuries. You'll be on firmer ground the next time you say no to the latest toy or tech gadget they ask for, and your decisions will no longer seem random, but part of an overall plan. "You don't have to share specific dollar amounts for income or spending," says Kobliner.
2. "You've been getting an allowance for a while. I want to be sure you're not only spending wisely, but also saving and giving to others."
As soon as kids start earning money, it's time they learn a little fiscal responsibility. Experts recommend that parents encourage children to divide their earnings into three categories: one-third for using as they please, one-third for a savings account, and the rest for charity. Once they're in middle school and making purchases on their own, kids need adult guidance on spending. "At this age they become outrageously brand-conscious and face an enormous amount of peer pressure to have just the right cell phone or clothing label—no matter what the price," says Linda Sherry, director of National Priorities for Consumer Action, a San Francisco-based education and advocacy group.
She suggests telling your tween to wait a day or two before buying something trendy; she may well realize she can live without another Aeropostale shirt, and the urge to splurge will pass. Another strategy is to have her make a list of pros and cons of the item before forking over her hard-earned cash. She still wants it? Go online and show her how to comparison shop. Kids love scoring a good deal but often don't have the patience or know-how to scout out the best buy. "You want to give your tweens freedom with their money," says Sherry, "but you also want to help them make smart decisions along the way."