Skip to main content

How to be good at money

Show Caption

Financial planner Mike Banasiak says there comes a time in every young person's life when a lightbulb turns on.

Maybe it's a few years out of college and into a "real" job. Maybe it's when a baby arrives. Maybe it's when inherited money arrives from a lost loved one. Something happens and the question hits hard: How do I get serious about this money thing?

"After you graduate college it seems like you need a few years to get settled in and sort your money, maybe pay off some debt," said Banasiak, 32, of Legacy Financial Group. "And then you start thinking long-term."


No other generation is scattered across the financial spectrum quite like millennials, the fastest-growing segment that Banasiak advises. He works with affluent, white-collar couples in their 30s, fresh-faced young professionals finding footing in their early 20s and everyone in between.

They all have questions, he said. And the way they earn, save and spend their cash seems to reflect the wobbly-kneed economy millennials have come of age in.

"I think it's made this generation more skeptical," he said. "It's made millennials more risk averse and maybe focusing their additional resources more on saving than investing. I think it's made them more conservative than they should be in their late 20s or early 30s …"

Banasiak worries young professionals who saw the financial crisis of 2008 eat their parents' houses or savings or jobs — or prevent them from gaining their own employment upon graduation — feel burned by the economy and the job market.

So they're saving money and spending carefully, which is good. But they may be more apt to put their money under a mattress rather than somewhere it can grow. Which is bad, he said.


This millennial skepticism around finance isn't Banasiak's idea alone, and it's not just limited to young professionals who are broke, in low-paying jobs or racked by college debt. It affects wealthy 20- and 30somethings, too.

Merrill Lynch's 2013 report, "Millennials and Money," looks at 153 of America's richest millennials, young adults who came into money, climbed corporate ladders or hit entrepreneurial gold.

All those polled by Merrill Lynch had $1 million to more than $10 million in assets that could be invested, the report found. Only 19 percent of these high-earners said they had a high level of financial investment know-how to match.

"One self-made entrepreneur was keeping his liquid net worth — in excess of $50 million — in cash," the report notes.

Iowa State University professor Tahira Hira is a personal finance expert appointed to the White House's first Advisory Council on Financial Literacy in 2008. Millennials' caution around money can indeed be a good thing, she said. It just has to be channeled into careful planning instead of constricting fear.

"Being cautious is very important," she said, "but that shouldn't scare us from living and making financial decisions. It asks us to be more knowledgeable, to learn and be careful."

Banasiak agrees. The young professionals he helps are much more hands-on with investing and knowing directly where their money goes than their boomer parents, a trend backed by Merrill Lynch's report.

Skepticism about saving and investing, for some, leads to a positive desire to learn first-hand about saving and investing.

"And if they do use an adviser, they ask questions. I think they want to be more involved in those decisions," Banasiak said.