Can I set a password for when my kids want to make a purchase?

You might want to consider getting the kids their own Apple ID and then set up Family Sharing. You can then set the Ask to Buy on their accounts. If they already know your Apple ID password, there isn't a way to set up a separate password for purchases.

Family Sharing.         

Family Sharing - Set up.       

Family Sharing -  Ask to Buy.      

If 13 years old or older.

Apple ID - create a new.      

Apple ID – Create         

If under 13 years old, you will need to set up Family Sharing to create an ID.

Family Sharing and Apple ID for your child.