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To teach teens respect for a paycheck, real-world work experience is invaluable. "When you're making 5 pounds [$7.80] an hour, you come to realize that money isn't easy to come by," says British university student Harry Elgood, the son of successful Oxfordshire entrepreneurs, who started working as a bartender when he was 18. While some parents might be eager to bring their offspring into the family business, the Gallos recommend that teens be encouraged to take jobs elsewhere, at least initially, so they won't get special treatment from co-workers. "To have a boss, to be part of a team, to get to work on time — there are so many skills kids can get from jobs," says Eileen.
Willis, the author and reformed spoiled brat, stresses that children need to experience the lives of the less fortunate to develop a "grateful spirit." She advises finding charitable causes for kids and ensuring that they see the results of their philanthropy. By researching different programs and working with a team of volunteers, youngsters can gain valuable perspective on how the rest of the world lives and how better to prioritize their own "give-save-spend ratio," says Willis. Helping others is a powerful tool for teaching children about sacrifice and detachment from material things, she says.
Children learn a lot just by observing their parents' behavior, so mom and dad need to set a good example, too. Carl Tancaktiong, son of the founder of Philippine fast-food empire Jollibee, admits his childhood was pretty plush. "I don't remember not getting anything I wanted," he says. Yet Tancaktiong, 28, says he has grown up to be reasonably frugal, not because his parents lectured about money, but because they had down-to-earth spending habits themselves, eschewing luxury-brand clothing and expensive cars. Tancaktiong, a general manager of one of the company's Chinese chains, says he and his siblings recognized early that the family fortune was not their personal piggybank. "The three of us knew this money wasn't earned by us," Tancaktiong says. "Had we been out of control with money, we would've had a big guilty conscience."
Wealthy parents aren't completely on their own when it comes to teaching their kids about money. Private banks are increasingly offering programs to educate the scions of high-net-worth customers in the finer points of financial management. "People tend to assume that if you have wealth, you have knowledge of wealth," says Sebastian Dovey, managing partner at Scorpio Partnership, which in August helped Swiss bank UBS roll out Dialogue, a new financial-education service. But having money and being savvy about it are "not directly linked," he says. Another such program is Citi Private Bank's annual NextGen conference, which has been held in Singapore and Hong Kong since 2003. Each year, the bank sends invitations to the adult children of clients whose net worth exceeds $10 million. Participants attend investment seminars, play finance-related games and take part in team-building and social events.
The proliferation of such programs might tempt parents to outsource their kids' financial education. But private banks can't impart the personal values and work ethic that help ensure success in life from an early age. Those character traits, like genes and family wealth itself, must be passed down from the parents.
— with reporting by William Lee Adams / London