Honestly, I think you did it right. You saw a teachable moment, and you jumped on it in an age appropriate way. Nicely done!

With our 5yo, we're currently focusing on spending awareness. For example, he brought home one of those scholastic book club flyers from kindergarten the other day. It had 4 books that, if bought separately, would cost $13. If you bought them as a set, it would cost $10. But, we established that buying just 1 book instead of 4 is cheaper still. And just going to the library or reading the books we already have is free!

We haven't really discussed saving for retirement yet, but if he asks about it, I'll probably try to do it the way you did. We've covered the basic concept of interest, so that may help. We also explained what a mortgage was and how much, in real dollars, we paid for ours. When he heard how much our relatively modest mortgage payment was a month, he did an actual spit-take. "That's a lot of money!" Yup--and that's why we work and don't spend our money on random stuff!