Editor's Note: This article originally appeared in the Fall 2011 issue of The Old Schoolhouse® Magazine, the trade magazine for homeschool families. Read the magazine free at www.TOSMagazine.com or read it on the go and download the free apps at www.TOSApps.com to read the magazine on your Kindle Fire or Apple or Android devices.

Everyone knows time is money—even kids. 

My 91-year-old father chuckles when recollecting his introduction to stocks and subsequent investment journey, which started late in life. Determined to let his grandkids in on the secret that money earns money and newly acquired money from stocks earns money too and so on and so on, he had them reading Peter Lynch’s Learn to Earn when they were in fifth grade and Mary Buffett’s Buffettology when in seventh grade. My kids understood that riches come from compounding money over time. It wasn’t long before they were scraping together their savings from birthday checks to dive into the stock market. 

At 8 years old, your kid may be cash poor, but he’s wealthy with youth. Unless you’re an oracle, there’s no way of knowing what returns will be like over the next hundred years; however, there’s reason to be optimistic about the future of the U.S. economy when one realizes that the world’s greatest investor, Warren Buffet, just completed his largest single investment ever, which he describes as “an all-in bet on the future of the American economy.” 

Kids like money. When I volunteered at my children’s elementary schools, I taught the U.S. Presidents using coins. During the first lesson, I handed each child a Lincoln penny. Then I handed each child a Jefferson nickel, a Washington quarter, and a JFK half-dollar. The money was theirs to do with as they liked. Most of them spent their money on cafeteria ice cream before the day was out—but not all! Even among the young, there are those who are imbued with a sense of thriftiness or those who like the sound of coins jingling in their pockets on the playground.

Can a sense of saving and a desire to grow money be taught the way cursive writing used to be taught or the way computer skills are taught now? If a parent makes saving fun and relative to children, the answer is “Yes!” If not, the impulse to spend that money that’s burning in their pockets may take over.

Make money matters matter. You invest in piano lessons without thinking your tot will become a virtuoso. You spend money on dance lessons but doubt your daughter will be a career ballerina. Kids need training wheels. Give them help and encouragement in fiscal matters when they’re small so that when they leave the nest, they’ll not fall flat on their faces and become statistics in the credit card usury of recent years.

Religiously, I journeyed a half-hour to the YMCA for swim lessons for each child when he/she reached age 3. As my kids got older, I wanted them to learn other nautical skills, attend swim camps, master water sports, and attain lifeguard certificates. They had no fear of water and a confidence that came from years of exposure. Kids can develop financial savoir faire just as they acquired swimming savvy. (Teens feel silly in floaties, yet they feel no shame at lacking the skill to balance a checkbook.) 

Can you impart knowledge about finances? Perhaps you have struggled to keep your books in order. You may find a discussion of money matters distasteful and not want your child to know that you don’t have a limitless supply of money. In choosing to keep your child in the dark about fiscal responsibility, you are hamstringing him for the future. Even if he earns a fortune later in life due to some windfall, inheritance, athletic prowess, movie star good looks, etc., that treasure may soon be preyed upon by predators who circle the clueless wealthy. Give your child the tools to protect himself from the Bernie Madoffs who stalk even the canyons of NYC. There are, and always will be, snake oil salesmen. Just as we instill ethics, laws, religious values, social etiquette, the birds and the bees message, and common sense in our little charges, we should cover the basics in money management in order to prevent their developing poor spending habits and sucker-type personalities.