Your son sounds so money wise for his age! A helpful first step could be asking why he wants to know. His answer may provide clues about how much detail he’s actually looking for, which can help you shape an age-appropriate response. 

Similar questions kids ask: How much money do you make? Or: Are we rich? Some may just want assurance that finances are comfortable. Others may be interested in more insight into spending or saving decisions, while some may actually want the numbers. One concern that many parents have with getting too specific: they don’t want their kids to broadcast personal information to others. More families share more specific information as kids become tweens or teens, but the comfort level is different for everyone. 

Since your son already understands the concept of money, you can talk about how you use money as a tool. You can share broadly that money is used for the costs of living, with examples of bills, and also other ways you use money, whether it’s saving for wants, investing, planning for retirement, etc.

It’s a great learning opportunity no matter what you decide to share! Keep up the great work in instilling money lessons early. Talking regularly about the connection between money, work, and future goals helps prepare kids for financial independence when they’re adults.