Why Baby Boomers Are the Worst With Money

LAS VEGAS ( TheStreet) -- Some age groups are better than others in managing their money.

Why the dichotomy? And what lessons can, for instance, baby boomers learn from Millennials?

Financial Finesse , an El Segundo, Calif.-based financial wellness services firm, has taken a microscope to the issue and finds that different generations have different strategies for managing their money on a "tough and very uncertain" economy.

Sometimes those differences work out for generational savers, and sometimes they don't.

"When you look at the generational groups as a whole, you recognize that they are really dealing with issues stemming from perspectives and habits rooted in their generations," says Liz Davidson, chief executive at Financial Finesse. " Millennials entered the workforce during a time when it was 'cool' to be thrifty, Gen Xers lived in the shadow of the boomers and have a generally cynical attitude toward achieving their goals, and boomers -- both late and early -- are part of a generation that had everything tailored to their needs. This really creates a different set of issues as a result for each group."

Davidson points not just at demographic groups who have done a mediocre job of managing their money, but at the financial services industry. She says investment firms focus on "a more analytical and technical perspective" to financial planning when they should be focusing on where financial consumers are in their lives and how those "life stages" affect their attitudes about money and saving.

That oversight may have really cost the baby boomer generation and could threaten the financial well-being of their kids and grandkids.

"There has been a lot of emphasis on the significant challenges facing boomers when it comes to retirement," Davidson says. "Namely that more and more employees in this generation are being forced to delay retirement or, worse, are having to retire for health reasons with insufficient savings. But not enough emphasis has been placed on younger generations who are already struggling more than boomers did at their age, due to the recession."

"This is hugely concerning because there will be an even larger crisis if other generations, especially the Millennials, who are now the largest generation in our history, cannot retire comfortably," she says.

Davidson's firm finds that, for now, Millennials are acquitting themselves quite nicely in their financial habits, but baby boomers and Generation X? Not so much.

"Millennials are managing the finances surprisingly well despite having by far the lowest income levels, while Gen Xers are having a harder time with debt, making ends meet and most aspects of overall financial planning," the firm says in a report released this week .

Financial Finesse notes that only 16% of "early age" baby boomers and 10% of "late" baby boomers have long-term care insurance, even though the estimated cost of nursing home care is $90,000 per year. Boomers are also more likely to sacrifice their own retirement savings to pay for their kids' college educations -- a noble, highly risky financial strategy.