The Five Rules of Money for Children

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When it comes to investing, children should learn how owning a diverse number of stocks and funds can grow in value over a span of many years. Massimo says his wealthy clients set up investment clubs—and let their kids pick three or four friends to join—to teach them investing basics. Wasilewski thinks that some of the online stock market games teach young people that stocks are a short-term holding and tend to go up, rather than the important lesson that stocks should be owned for the long run and can easily decline.

To learn about the economy and personal finance matters, Wasilewski recommends the Federal Reserve's Web site, which also features a Kids Page.

4. Stay out of debt.

Credit card offers with your child's name arrive in the mail sometimes as early as high school. Show your kids your credit card bills and how to pay them off on time to demonstrate how the cost of an item goes up because of the interest charged. And teach children how the bad habit of paying late can put you in a deep financial hole.

At the same time, it's important to establish a good credit history, because there will likely be a time when your kids are going to need to borrow money. "The big problem is, young people don't really understand how to get interest to work for them," Wasilewski says.

5. Giving back is the best gift.

Donating to charities, including volunteering in your community, is "a really important value for children to learn," Silverman at PNC says. At a young age, your kids can donate clothes and toys that are usually collected by organizations around the holidays. According to the recent PNC survey, 40% of parents said they encourage kids to participate in community events. Many high net worth families set up foundations and let their children pick the socially responsible causes they want to get involved with, Massimo says. "They want to teach the value of giving time, but also giving money responsibly," Silverman says.

Another way to give back, Massimo says, is teaching kids how to invest in socially responsible stocks—usually companies that are environmentally friendly and don't make alcohol, tobacco, and firearms—or funds that emphasize those kinds of stocks. Whether it's getting, spending, or giving, teaching your children some sound financial principles now should help them to make smarter choices about their money as they grow older.

McCormack is senior producer for BusinessWeek.com's Investing channel .