Having financially secure children and grandchildren isn’t so much about the size of their inheritance as it is about the financial muscles they have been taught to build. Photo by Ridofranz/Getty Images

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There is an old proverb: “Hard times create strong individuals; strong individuals create good times; good times create weak individuals; weak individuals create hard times.”

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I think of this proverb often when I work with clients who have some wealth and want to help their adult children. Given the costs of real estate and other expenses of life, many Canadians in their 50s, 60s and 70s are in meaningfully better financial shape than their children and want to help.

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There are usually three core questions when it comes to financially helping adult children: Can I afford to help them with $x each? One needs the funds, the other two don’t, so how do I manage that? How can I make sure they use the money wisely?

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Regarding affordability, good financial planning can really help you to see with confidence what your financial situation will likely look like through to the end of your life. By comparing gifting and not gifting, you can see whether you can easily afford to gift a certain amount of money today.

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On the second question, the general rule of thumb is to give to all your children equally, whether they need it or not. There can be extenuating circumstances that lead to a different decision, but under the guidance of avoiding the mother-always-loved-you-best syndrome, we aim to give equally.

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On the third question, it takes a lifetime of parenting to help improve the odds that your adult children will spend money wisely.

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My oldest child is 24 and has been running her own business for a few years. She was buying a car and wanted me to go with her to the dealer. As I sat there and watched her negotiate, she was really tough. She didn’t give an inch. She was prepared to walk away if she didn’t get her deal.

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Eventually she got pretty darn close to what she was asking for. I told her how impressed I was, but also that I probably would have taken their second-last offer. She said, “I worked hard for that money. Let them work hard for theirs.”

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Imagine how that conversation would have gone differently if I were paying for her car and she was negotiating. I can guarantee we would have paid more for the car.

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It reinforced a lesson that I have tried to teach my kids. My wife and I often tell our kids, “We have some money … you are poor.” As it turns out, that isn’t true for my daughter anymore, but the message was important: whether their family has money or not, they are young and have to build their own wealth. It is on them.

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Of course, not everyone has the same set of skills to build their wealth and not everyone wants to. Some people are born spenders; others are born savers. The key is to build a foundation that allows them to be as successful and responsible as they can be with finances.

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There are four ways to improve those odds.

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First, try to teach the connection between working and making money from a young age, whether it’s paying $5 to complete a specific chore or encouraging them to have a lemonade stand or go door to door with a snow shovel after a storm.