Teaching kids about money at Disney World

Cinderella's Castle at Walt Disney World's Magic Kingdom in Lake Buena Vista, Fla. is seen on Friday, Jan. 26,2006. A night's stay at the castle was one of prizes given randomly to unsuspecting park guests recently as part of the launch of Disney's "Year of a Million Dreams" campaign." (AP Photo/Reinhold Matay)

(MoneyWatch) COMMENTARY I spent the past week with my three small children at Disney World. It was our first visit there, and we had a great time. However, while Disney may be the happiest place on Earth, I quickly made a discovery: It's also one of the most commercial places on Earth. You can't turn around in the parks without landing in a store selling Disney gear. Crystal glass slippers! Mickey Mouse ears! Peter Pan figurines! Most of the major rides seem to exit through a gift shop.

My children aren't in stores very often, so this was all a bit bewildering to them. But my 4-year-old caught on pretty quickly. As we came out through one gift store, I told him (legitimately) that I didn't have any money on me. My husband had our resort keys with charging privileges. But of course, that's merely a temporary answer, and the next day in another gift store he asked if I had money today.

So what to say? Since I recently wrote a book on personal finance (All the Money in the World), people have asked me the question a lot on what to tell their kids about money. I'm still working through this myself. On one hand, I don't like spending my hard-earned money on some plastic toy that's going to land in a pile of other plastic toys the second we get home. On the other hand, holding the line on small toys seems kind of silly given what the whole vacation cost. We spent more on airport parking than we spent on souvenirs. Even more pertinent: Mom and dad spent more on alcohol during the trip than the kids wound up spending on toys. Why is my fun more important than their fun?

Thinking it through, I think there are two best approaches for teaching kids about cash in a retail-rich environment. For older children (who can count) you can set a "gift shop budget" from the beginning. They can spend it on what they want, or keep the cash if they don't. Some kids will blow it in 5 minutes. Some enterprising children will likely lend out their cash at usurious interest rates to their more profligate brothers and sisters. You will learn a lot about your children from this exercise.

Then there's what we did. We avoided the stores when we could, because the rides and shows are more fun. When my son asked about buying things, or if I had money, I said "Yes, we have money, and there are many wonderful things here, but we also have lots of wonderful toys at home." We tried to recall what we had and realized we already owned various Toy Story characters, stuffed animals, etc. Then I'd redirect: "Hey, want to go ride Buzz Lightyear again?" Finally, on the day before we left, we let the kids pick out a cheap (under $20) souvenir from one store. I caught myself trying to steer my 4-year-old away from a plush toy before realizing that's really what he wanted. My 2-year-old wanted a miniature version of the monorail. The baby was asleep. As a bonus, I bought them all T-shirts. Still, we made it out of Disney World spending less than $100 on souvenirs, without falsely claiming poverty. I think that's pretty good, considering the ubiquity of the stuff available.

How do you teach your kids about money in the mall or at an amusement park? Share your comments below!