I have taught my children early on that to get money you need to work. To do this we assigned jobs to each child and pay them per week.
My oldest babysits, does dishes, takes care of animals, and helps me on many jobs around the house. He gets about $40/week for this. In addition, I force him to save half of what he makes and he gets to spend the other half however he wants (toys usually but books more often lately). By doing this he has saved up $500 in his investment account. I talked with him last night and talked him into giving it to me as a CD. I have a house mortgage at 7% (land loan that I can't refi... long story) that will last until March of 2015 so he will make great money until then. He has learned the concept of interest through Math so I know he gets it.
Similarly, my daughter makes about $30/wk doing dishes, helping me by raking leaves, etc. As of tonight she has $150 so I have done the same for her money. Not quite sure if she understands interest yet... but she trusts me enough that she understands her current investment will make more money as a loan.
Definitely they get the hard work part as they never ask for money but rather ask how I need help. Just need to find a way to help them understand the value of investing and I'm embarrassed that it took this long to figure out the 7% option... They do have other investments as my oldest also bought a riding mower that he uses to cut grass and both own farm animals they purchased with their own money (decent ROI as I subsidize housing/feed and they collect pure profit later...). Very proud of their hard work as I rarely have to tell them to do their chores.
Frugality is harder to teach I think. Definitely we don't have a lavish lifestyle (lived in a rundown singlewide trailer for a year while building our house) and they often buy things at yardsales and Goodwill. But will they adopt this as their own? Or make their own choices.
