You can help your children financially in many ways, even after they are well into their adult years. And most of these ways don’t involve giving them money.

How? Set a good example.

Whether we’re talking about effective parenting, being a good spouse, or providing effective leadership in the business world, "modeling the way" is a much better way to influence others positively vs. the old "do what I say, not what I do" approach.

It’s no different when it comes to helping your children develop good financial skills.

Sure, you can donate cash to their savings accounts, set up EE bonds in their names, or give them shares of stock or mutual funds. But the gift that really keeps on giving their entire lifetimes is a solid financial education backed by the demonstration of your sound money values.

You can teach them the best money management skills in the world, but if you don’t exemplify good money management judgment yourself, they probably won’t either.

It can start as early as their first allowance with the first opportunity to help them understand the importance of setting priorities within a simple "budget" plus setting some money aside to save for an important future goal. Extra rewards for special duties or projects can leave a lasting positive impression.

Give your children money management materials appropriate for their ages. Have them learn directly from you such financial skills as household budgeting, investing, retirement planning, insurance, taxes, charitable giving, how to read a pay stub and balance a checkbook, and what role money should play in their lives. Avoid unnecessary debt. Support worthy charities. Live below your means and save the excess. Let your children participate in the family financial decision-making process.

When they first start earning taxable income from outside jobs, help them open an individual retirement account. I generally recommend a Roth IRA, which is funded with after-tax money, because the tax-savings benefits of a traditional IRA are minimal for children earning little income. With the Roth, they can later withdraw the contributions and the earnings tax free. Share with them what you are doing to fund your own 401(k), IRA, Roth IRA, and/or savings and investment accounts.

This can help reinforce the message that they will likely have to fund most or all of their retirement, as employer pensions are disappearing and Social Security may only provide minimal help.

Don’t be a financial burden on your adult children. This means not only making sure your retirement is properly funded, but that you can pay for medical care and possibly long-term care - two huge expenses during retirement that many overlook. Review your medical coverage, including possible retiree health benefits, Medi-gap insurance once you start Medicare, and long-term care insurance. Spare your children the financial burden of having to financially assist you at a time they’re probably trying to save for their own retirement or put your grandchildren through college.

Through your initiative, a financial planner can also directly help your adult children. For example, consider contracting with a trusted fee-only planner to engage in a financial planning process with one or more of your children. This could be a wonderful birthday or holiday gift to a child and spouse. A client couple with whom I work recently updated their wills. They added a provision that left a bequest of several thousand dollars for the benefit of each child, specifically for the purpose of working with a planner to develop and implement a comprehensive financial plan. If after a few years a child shows no interest, the money is then directed to a charity of the child’s choosing.

How’s that for thinking outside the box?

Regardless of age, consider making it a priority to help your children get on the path to financial responsibility. It’s never too late. It may be the most important "investment" you’ll ever make.

James Terwilliger, Certified Financial Planner™, is Vice President, Financial Planning, Wealth Strategies Group, Canandaigua National Bank & Trust Company. He can be reached at 585-419-0670 ext 50630 or by email at [email protected].