If you are writing for the Literati or a high-toned publication, then, by all means, use the biggest words that you know. (caveat: If you have to look the word up, then you probably should not use it.)
Like some of you, when I was a preadolescent, I spent much of my days reading Encyclopedia Britannica and Webster's unabridged dictionary. Do you remember the Britannica edition with the world language dictionary appended? It may surprise some of you to know that many of your readers decided to go outside and play ball instead.
I find that I am always searching for the word that means exactly what I am trying to express in the fewest syllables. This can be a problem if the intended audience has never even heard the word before.
The first time that I tried to read the Iliad I put it down because I grew tired of looking up the definitions of triremes and greaves among the sea of vessels and armaments described in Homer's work.
The problem is not limited to vocabulary in the sense of five-dollar words. If your audience is completely bilingual, that’s great. Otherwise, you need to add some context so that reader knows that you are catching a train at the Bahnhof or that Tia is your mother’s sister. Handle your cultural references carefully as well.
All that being said, your child characters don’t have to say “Yo, what’s poppin’?” or whatever the phrase-of-the-week happens to be. Retain the voice that works for you. Your voice is what makes your work unique. Just be sure that your audience gets the message.