7 ways to manage money better than your parents did

• Jeff Rose, Credit.com

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You can't borrow money for retirement.Scott Roth/AP

Every generation has their own habits when it comes to money.

Whether it was our parents stashing cash in paint cans or their bedroom mattresses, or our great grandparents balking at investing after the Great Depression, generational events help mold how we manage our lives.

Sometimes it's a good thing. Learning to be frugal after living through hard times can leave you better off, for example. Then again, some financial habits from decades ago have absolutely left people worse off.

If your goal is avoiding many of the financial pitfalls your parents (or their parents) fell into, you should strive to learn positive money habits while unlearning any lessons that stifle wealth.

I spoke to several financial planners to hear their thoughts on how the younger generation can do better than their parents. (Full Disclosure: I am also a certified financial planner.) Here's what they said.

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1. Avoid Placing Blind Trust in Financial Advisers

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Your parents and their parents likely met with a financial planner during their lives. They didn't have as much information at their disposal as we do today, so they hired professional help.

Unfortunately, many placed too much trust in the financial professionals they hired. Without much oversight, old school financial advisers were able to line their own pockets at their client's expense, usually by selling them high-cost investments with low returns they didn't understand.

To avoid falling victim to bad advice, you should learn as much about investing as you can, says Colorado financial adviser Matthew Jackson of Solid Wealth advisers.

"Dedicate yourself to learn about investing so you can make educated decisions about your retirement rather than risk being led down a wrong and costly path," Jackson said.

"In the age of technology, educating yourself about finances can be free and done in the comfort of your own home," he continued.

You should still consider hiring a financial adviser, however. Just don't trust them blindly. Brian Hanks, a financial adviser and author of How to Buy a Dental Practice said your best step is to find an independent, helpful, fee-only adviser who is paid a flat fee to offer comprehensive advice.

By avoiding advisers who are paid commissions for the investments they sell, you can ensure you're getting unbiased advice meant to benefit you.

2. Diversify Your Investments

Many people from the older generation have a narrow view of what it means to invest. Unfortunately, they tend to believe their way is the best way – even if it's not the best way for their kids.

"If the parents are risk averse, they tell their kids to save their money in bank CDs, pay down debt, and avoid things like equities," said financial adviser Joseph A. Azzopardi of The Well Planned Retirement. "If the family's wealth was primarily made in private business, they encourage their children to focus their capital on business ownership."

While many of these strategies can be successful when it comes to building wealth, there is no single best strategy. That's why Azzopardi and many other advisers suggest their clients diversify instead of putting all their eggs in one basket.

"Diversifying a family's balance sheet is a valuable way to lower overall risk and create multiple sources of income," he said.

3. Switch Employers When it Benefits You

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Our parent's generation was strikingly loyal to a single employer, often to their detriment. Even when they had the opportunity to make more money, they often eschewed that option based on a misguided sense of duty.

"Many people just put their heads down and went to work every day, never thinking that there might be a better opportunity across the street," says financial planner for business owners, Grant Bledsoe.

While loyalty is admirable, the advice to stick with a single employer for life is rather outdated today.

"You can be loyal to your employer of course, but need to be more strategic about your career advancement," says Bledsoe. "You can really boost your earnings by continuing to improve your skill set and taking calculated risks along the way."

4. Plan for a Lengthy Retirement

These days, people are living significantly longer. For the younger generation, that means we need to save up more cash to retire.

"As life expectancy continues to grow, present and future retirees will need to plan for a retirement that could span the course of several decades," said Seattle Financial adviser Josh Brein.

Whether you sit down with a financial adviser or plan your investments yourself, make sure you're planning for a lengthy and expensive retirement. According to the Social Security Administration, men and women who reach the age of 65 can expect to live until ages 84.3 and 86.6, respectively.

5. Put Your Own Financial Health First

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Our parents placed a lot of faith in higher education, so much so that many worked hard to pay for their children's college education while neglecting their own retirement needs. This is a mistake, said financial adviser Joe Carbone of Focus Planning Group.

No matter what, you should remember you can't borrow money for retirement. And, once you reach retirement age and find you're short on cash, it's too late.

6. Learn Basic Financial Education Early

In many families, the topic of money has always been taboo. You don't speak of it because it's "rude," or because it's an adult topic that shouldn't be discussed with the kids.

But, not talking about money can be devastating for young people who reach adulthood without basic financial knowledge. Because of this, most financial advisers agree today's parents should teach their kids money basics like budgeting and how to manage credit scores.

"Let's face it, it almost completely falls on the parents to be the money professor since it's rarely touched upon in our education system," said Kansas City Financial Planner Clint Haynes.

If you don't teach your kids about money, you can expect them to learn their lessons the hard way.

7. Build a Lifestyle That Doesn't Require Debt

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Today's climate of cheap and easy credit started decades ago. Unfortunately, many of our parents embraced the idea of borrowing money to buy things they couldn't afford.

This has led to the acceptance of ideas like the "perpetual car payment" and huge mortgages.

Albuquerque financial planner Jose Sanchez said his dad fell into the trap of financing an expensive car long ago when car loans first came into play. After getting his first job, he went out and bought a new 1968 Camaro, mostly because he thought "he deserved it." But, after having kids and settling into working life, he realized the purchase was more of a financial burden than he thought.

Today's workers would be wise to reject the easy credit atmosphere that is so prevalent today. The less money you owe, the more options you have.

And when it comes to building a life you truly love, the more options you have, the better off you'll be.