My husband is both a full-time high school biology teacher and a part-time college biology professor. During the summer, we're out almost $1000 a month while he is on break from the local college. Given that neither of us are fabulous budgeters, summertime expenditures are practically nil and that means explaining some harsh realities to our son.
His reaction? "OK." That was it. I was honest with him. I was real with him. He was OK with that.
He forgets sometimes. He's four. I remind him and he goes right back to being OK with it. "Oh, ya, I forgot," as he scurries off to find another way to entertain himself.
The point? Just be forthright with kids. They can handle it. They get it. They aren't as selfish as we make them out to be. In fact, they're pretty cool.
I'd write more, but my son has just started building a "tall, tall tower" out of the couch cushions (for free) and, according to him, he needs help stabilizing it. Free fun, learning, and bonding, comin' up!