Everyone here has basically hit it on the head. Parents should always be honest with their children. Children come to you with sincere, honest questions and they deserve sincere, honest answers. Responses should be short and age appropriate. Let them continue asking questions until they have no more, but stop what you are doing, sit down, look them in the eyes and let them know you are listening, understand them and will do your best to answer.
We are not made happy by what we acquire but by what we appreciate.