TIME Budgeting

The 1 Task Americans Just Can’t Accomplish

Stack of money
Getty Images

And, worse, it's a serious oversight

When it comes to budgeting, we have good intentions—really, we do. It’s just that somewhere between the idea of keeping track of our money and spending within our means and the execution of that pretty important task, we fall short.

According to a new survey from Bankrate.com, 82% of Americans say they keep a budget. That’s up from just 60% in 2012. Sounds great, but we really shouldn’t pat ourselves on the back just yet.

When Bankrate asks exactly how people keep their budgets, it finds that about a third just scrawl it out on paper—and almost 20% say they budget just by keeping track in their heads. “Mental accounting is really unreliable and prone to mathematical mistakes and rationalizations,” says Claes Bell, Bankrate.com’s banking analyst. ” In survey after survey, Americans show a lack of basic knowledge about some critical issues.”

Bankrate’s survey finds that fewer than 40% of Americans have money for a $500 or $1,000 emergency like a medical bill or car repair. To pay for an unexpected expense, about a quarter say they’d cut back on their spending, 16% would hit up family or friends for a loan and 12% would load up their credit card.

“In part this is a reflection of the economic struggles many Americans have gone through since the Great Recession,” Bell says. “Many households simply haven’t had the ability to set aside an emergency fund.” But now that the economy is on the upswing again, he says we really ought to stop making excuses and trying to keep track of our spending by memory alone, in order to sock away a rainy-day fund.

“I do think people really underrate the importance of having a cash reserve on hand to cover emergencies,” Bell says. “For many, a financial downward spiral is just one emergency-room visit away.”

Bell says people should take advantage of websites or apps that help you make and stick to a budget. Not big into technology? Even a basic spreadsheet is a step up from pencil and paper (or relying on your memory). Using a computer lets you track your spending over time and save that information so you can go back to it later — because are you really going to save and file all those pieces of paper you’d be using instead?

Keeping track of your budget electronically also means you’re less likely to make a mistake in the math, Bell points out. “Also, some budgeting tools and apps allow you to connect their services to your checking accounts and credit cards so you actually see how your spending compares to what you budgeted, automatically and in real time,” he says.

MONEY Budgeting

10 Free Tools for Creating a New 2015 Budget

Keep that New Year's resolution to better track your spending with these handy free tools.

So your spending went a little haywire during the holidays. Now is the time to get back on track with a new budget for 2015.

These days, it’s easy to track spending and set up budgets, often without the need to log in to any complicated software program.

For those looking to do a better job of tracking spending and keeping their financial goals within reach, these tools should help you as you head into the new year.

1. Mint

Mint offers an array of tools to help with budgeting. It’s possible to link all of your financial accounts, including your investments, and view them on a single platform. You can also track and categorize all transactions, and export your financial data to your TurboTax account at tax time. Best of all, you can set up an unlimited number of budgets and even establish goals to track. Mint is available online and on apps for smartphones and tablets.

2. Personal Capital

If you like Mint, you’ll also like Personal Capital. Its budgeting tools are not quite as robust, but I find it’s a little snappier than Mint. Personal Capital also offers financial advice and management for a fee.

3. Buxfer

Buxfer allows you to sync all of your accounts just like Mint and Personal Capital, but has an added feature that allows you to send money to friends and family online. It also helps you dole out shared expenses, like portions of rent or groceries, so it’s perfect for young people with roommates.

4. BudgetPulse

This web-based application is a good option for those who prefer to not link all of their accounts. BudgetPulse requires a little bit more work, because you have to enter all of your financial information manually, but it has a nice interface and some easy-to-adjust budgeting tools.

5. Level Money

Level Money allows you to enter your income, expenses, and “spendable cash” and then offers a real-time picture of what you’re buying and how much cash you have left. It’s best feature is its simplicity.

6. GnuCash

The GnuCash personal and small business accounting program has many devotees because it’s free and works on almost any computer platform, including Linux. Because it’s based on the double-entry accounting system, it’s very robust (and sometimes confusing for those unfamiliar with double entry). Still, with it you can track bank accounts, stocks, and other financial information, and get helpful charts. It’s also possible to import from software programs such as Quicken.

7. Spendee

The first step to budgeting is learning where your money is going. And that’s Spendee‘s strength. It’s easy to enter transactions with just a few taps on the app (iPhone and Android), and the interface is about as clean as you can get. The budgeting tools aren’t as robust as other apps, but you may find it’s just perfect enough for tracking spending.

8. HomeBudget

A well-reviewed app for iOs, Android, and desktop platforms, HomeBudget is great for couples who want to manage budgets together. The app has a slick interface and offers a syncing capability that allows more than one user to track spending and income. The downside to this app is that it costs $4.99, but many find it worth it.

9. Paper Envelopes

Yes, just a handful of plain white envelopes will help you stay on the right financial path. Fill each envelope with a specific amount of cash for certain items. Once the envelope is empty, you can’t spend any more on that item. It’s a simple, but effective, way to reduce your dependency on credit cards and rein in your spending.

10. Microsoft Excel

This may seem a little outdated — and it’s only free if you already have MS Office installed — but it can be effective. Microsoft’s spreadsheet program offers a simple monthly budget template that allows you to compare monthly income and expenses. Sometimes simple is best.

If truly free is your thing, you might try a similar template on Sheets, google’s free alternative to Excel.

Read more articles from Wise Bread:
Fess Up to Your Addictions: How to Satisfy Them on a Frugal Budget
Making Every Penny Count With A Zero-Based Budget
The Most Valuable Thing Debt Takes From You Isn’t Money — It’s This

MONEY retirement planning

What Scrooge Can Teach You About Retirement Planning

Scrooge in A Christmas Carol
Scrooge in "A Christmas Carol" © Walt Disney Co.—Courtesy Everett Collection

Sure, he was tight-fisted. But Scrooge's money habits are a useful model for reaching your retirement goals.

I can hear the cries of outrage already. How can A Christmas Carol‘s Scrooge, the character Charles Dickens described as tight-fisted, squeezing, wrenching, grasping, scraping, clutching and covetous, possibly be a paragon of retirement planning? Bah humbug! If anything, he’s a role model for how not to live one’s life!

And I agree, up to a point. But if you’re willing to overlook a few of his, shall we say, flaws, good old Scrooge also possessed some qualities that make him a pretty decent role model for achieving a secure and meaningful retirement. Here are three we may well to emulate, albeit in moderation, to improve our retirement outlook.

1. Scrooge had a phenomenal work ethic. When the novel opens, Scrooge is at work in his counting-house late in the afternoon on Christmas eve. He didn’t duck out early to do some last-minute shopping. He wasn’t posting Happy Holidays photos on Instagram. He was putting in a full day’s work.

Granted, in recent years millions of people who would like to do just that haven’t had the option. Perhaps the recent upbeat employment report signals a more vibrant jobs market ahead. But the fact remains that the commitment to work that Scrooge displays is crucial to a successful retirement for two reasons: you can’t build a nest egg without regular income; and the amount you earn and number of years on the job largely determine the size of a key source of retirement income: your Social Security benefit.

Note too that Scrooge was still working relatively late in life. Dickens doesn’t give Ebenezer’s age, but many people estimate he was in his late 50s or 60s, which is getting up there considering life expectancy in mid-19th century England was about 40. So we can take a cue from Scrooge on this score as well. For example, in their new book Falling Short: The Coming Retirement Crisis and What To Do About It, authors Alicia Munnell, Charles Ellis and Andrew Eschtruth point out that just a few extra years on the job can go a long way toward improving one’s retirement prospects. And if that doesn’t do the trick, you can always supplement your income by working in retirement.

2. The man was a prodigious saver. Scrooge definitely knew a thing or two about saving a buck. And he didn’t resort to gimmicks like apps that round up credit card purchases to the nearest dollar and deposit the difference in an investing account, giving you the impression you’re saving while encouraging spending. He did it the old-fashioned way by keeping his everyday living expenses down.

He went way, way too far, of course, what with living in the dark, keeping a very small fire and eating gruel from a saucepan. But he had the right idea—namely, if you live below your means by not splurging on over-the-top vacations, expensive cars and big houses with mortgage payments to match, you’ll have a better chance of saving the 15% a year that can lead to a comfy retirement. And while Dickens doesn’t get into Scrooge’s investing habits, my guess is that ol’ Ebenezer wouldn’t fall for pitches for dubious or expensive investments. I think he’d be an index-fund kinda guy who realizes that reducing investment fees boosts the size of your nest egg and the amount of income you can draw from it.

3. Scrooge (eventually) understood what really matters. This may very well be the most important lesson we can draw from Scrooge. Sure, it took visits from his dead business partner Marley and a few ghosts to transform him. But by the end of the novel, Scrooge has morphed from a pinched and selfish man into a generous and compassionate person who anonymously sends a turkey to the Cratchit home for Christmas dinner and becomes like a second father to Bob Cratchit’s son, Tiny Tim. In short, he realizes that wealth brings happiness only when we share it with our families and others in ways that improve all our lives.

So while it’s important to focus on making good financial decisions, we should never forget that retirement planning isn’t just about the bucks. Ultimately, it’s about creating a retirement lifestyle that has meaning and purpose as well as financial security.

So if your thoughts happen to stray to your retirement over this holiday season and you find yourself wondering how you might improve your planning, ask yourself WWSD—What Would Scrooge Do? Whether it’s the stingy Ebenezer or the more benevolent version, he just might provide the inspiration you need.

Walter Updegrave is the editor of RealDealRetirement.com. If you have a question on retirement or investing that you would like Walter to answer online, send it to him at walter@realdealretirement.com.

More from RealDealRetirement.com:

How To Invest In Today’s Topsy-Turvy Market—And In The Year Ahead

What’s Your “Magic” Retirement Number?

Does Uncle Sam Want To Contribute $2,000 Toward Your Retirement?

MONEY Kids and Money

Teach Your Kids Financial Values…Via Cellphone

boy on smartphone in kitchen
Catherine Ledner—Getty Images

A child's first smartphone can be a tool for teaching about budgeting, the value of work, and other important concepts.

After I have helped clients prioritize their financial goals, they commonly ask me a followup question: How do we teach these values to the next generation?

Start early, I tell them. And use a smartphone.

Let me explain. For many children nowadays, a smartphone will be their first valuable possession. They start asking begging for one when they’re around 8 or 10 years old, depending upon how many of their friends already have one.

We don’t know what impact early adoption of technology will have on our children once they become adults. As a financial coach, I see that parents are overwhelmed. New technologies are available every year, making parents feel like Maggie Smith’s Dowager Countess character on Downton Abbey: “First electricity, now telephones. Sometimes I feel as if I were living in an H.G. Wells novel.”

The purchase of a child’s first smartphone is an ideal opportunity for parents to pass on their values to children. I encourage active discussions between parents and children about the family’s intent for the phone, many of which may be reflected in the values below.

Open communication: From the beginning, outline the consequences if a child dodges her parents’ calls or ignores their texts. Talk about how this cellphone is meant to keep the family connected, not just to fuel her social life.

Hierarchy: Parents can exercise their authority through a variety of smartphone parental controls.

  • Check-in at tuck-in: Parents enforce this by keeping the charger in their room or in the kitchen. The cellphone needs to be in that spot when the child goes to bed, thereby preventing distractions from the phone and friends during sleeping hours. One client who uses this system was surprised when her daughter handed her the phone before she left for a sleepover: “I guess I need to check this in,” she said. Success!
  • Geolocation: If a parent would like the security of knowing a child arrived at a destination safely, or technological proof that a kid is being truthful, they can track the phone’s location with an app such as Life360.
  • Setting limits on texting/minutes/data: Some carriers offer this feature with unlimited family plans. Or parents can take the more rudimentary route below.

Wise resource management: What messages do we communicate when we give a kid this unlimited resource without requiring any payment from them? How do we engender a strong work ethic? One way is to subscribe to a plan that charges by the minute or unit. You won’t save money, but your child will learn to budget her resources. You can buy a TracFone, give her a monthly allotment of minutes, and explain she has to buy her own if she surpasses the allowance.

Work orientation: Taking this line of thinking a bit farther, if a child uses up her monthly allotment on a pay-as-you-go plan, she now has a choice. Either she stops talking — which could backfire if she can’t check in with parents — or she finds a way to get more minutes. TracFone minutes can be purchased anywhere at increments as small as $10, so it’s easy for a child to get more minutes if she’s willing to earn the money. Or alternatively, she can ask for minutes as gifts for holidays and birthdays. Either way, the child will need to become resourceful, and it’s never too early to exercise that muscle.

Predictability: Americans love to control our environment. In the financial realm, that often takes the form predictable expenses. In the past, roaming charges could exponentially increase your bill if you weren’t careful. These days, data usage (used for streaming video, sharing photos, or downloading apps when a phone isn’t on a wi-fi connection) is the variable that can quickly escalate the monthly total. Take these variances into account to select a plan that works best for your family, and make sure everyone understands the plan’s overage policies to avoid nasty surprises when the bill arrives.

In sum, a smartphone is an opportunity to teach a child about what really matters. Technology is just like money: It is simply a tool to make us more effective in the important stuff. But children are especially likely to subvert that understanding, mistaking technology or money as the end goal in life. So it is worth the time to guide their consumer choices, and their values, while they are still at home.

———-

Candice McGarvey, CFP, is the Chief Story Changer of Her Dollars Financial Coaching. By working with women to increase their financial wellness, she brings clients through financial transitions. Via conversations that feel more like a coffee date than a meeting, her process improves a client’s financial strength and peace.

MONEY Kids and Money

3 Ways To Help Your Kids Become Good Gift Givers

Cashew-caramel brownie in baking pan, elevated view
James Baigrie—Getty Images

Children spend a lot of time thinking about what they'll get for the holidays. Use these tips to turn them into givers too.

Ah, the holidays. The season for time-honored traditions like decorating the tree, lighting the menorah, wrapping gifts … and wondering whether you have raised the most selfish kid in the world.

Almost every parent has felt this at one time or another, as toddlers and teens obsess over accumulating more and more holiday stuff. Robin Gorman Newman is no different.

“Like any kid, my son loves to receive,” says Newman, mom to an 11-year-old in Long Island, N.Y, and founder of the organization Motherhood Later for moms over 35.

“They’re all obsessed with getting, especially when they’re younger,” Gorman says. “If you saw my basement, you would know what I’m talking about.”

Which is why Newman embarked on a campaign to shift her son’s mindset from getting to giving. First on the agenda: Baking brownies to bring to the local firehouse, and to families of sick kids staying at the local Ronald McDonald House.

For parents who are trying to encourage giving instead of getting, it can often feel like shouting into the wind, especially at this time of year. American adults are planning to splurge an average of $861 on gifts this holiday season, according to a new survey by American Research Group.

That’s up 8% in a single year, surpassing 2007 numbers for the first time since the recession hit. As a result, little Johnny and Janie can expect to rip the wrapping paper off more boxes over Christmas or Hanukkah.

But don’t despair. There may be hope for turning kids into givers.

According to data from Allowance Manager, a service that helps parents automate allowance payments and track their kids’ spending, many children are setting aside a surprisingly healthy amount for gift-giving.

Roughly 9% of allowances are allocated for gift purchases, a figure that spikes in November and December. And that does not even include charitable donations, which account for an additional 6% of allowance use.

The key question: How do you trigger that mental shift, to get kids thinking of others rather than just themselves?

Have Them Use Some of Their Own Money

Obviously, young children are not going to have a lot of financial resources to tap. But even if it involves very small amounts, have them use some of those resources for gifting.

It drills in the critical personal-finance habit of setting up different buckets for different purposes, one of which should be devoted to others.

“Handling money is best learned through first-hand experience,” says Dan Meader, CEO and co-founder of Rancho Santa Fe, Calif.-based Allowance Manager, which has over 200,000 users. “So we think it’s important that kids get the chance to use some of their own money for gifts, instead of just using their parents’ money.”

Enforce Artificial Limits

Since we’re dealing with modest sums like allowances, you don’t want kids spending everything they have on holidays gifts, or feeling inadequate for not being able to purchase very much.

One elegant solution: Set a hard cap on how much can be spent, advises Ron Lieber, the “Your Money” columnist at the New York Times and author of the upcoming book The Opposite of Spoiled.

“See how may things you can buy for under $20, or figure out the most fun you can create for under $20,” he says. “If you put a cap on it that way, kids can be generous in spirit, without spending every cent they have.”

Set Up a Matching Program

To maximize your kids’ giving, consider what many charities do to supercharge donations: Create a matching program.

If your child saves $5 for family gifts, match it dollar-for-dollar, suggests Lieber. Then take it up a notch: If they save $10, contribute $1.50 for every dollar. If they reach $20, match each dollar with $2 of your own.

“That way it ratchets up, so the more generous they’re willing to be with their own funds, they will have exponentially more impact,” Lieber says.

Encourage Non-Monetary Gifting

There’s no rule that says more spending equals more thoughtfulness, despite what all those TV commercials might suggest. As every parent knows, some of the best gifts don’t come with any price tag at all.

But it may require some creativity. One idea from Lieber: A ‘coupon book’ of handwritten gift certificates that family members can give each other. “A dad might give a coupon to drop whatever he’s doing and play a game, or to ditch work once in the next 12 months and do whatever the kid wants to do,” he says.

“Things like that don’t cost anything, and are often incredibly memorable.”

Indeed, when Robin Gorman Newman looks around her house, her most cherished gift from her son wasn’t bought in a store at all. It’s an acrostic of the word ‘Mommy,’ with each letter standing for its own phrase such as “M is for Making Me Smile.”

“It doesn’t get any better than that,” Newman says. “That’s worth a million bucks right there.”

MONEY

How to Cook a Real Dinner for Your Family…and Finish Before 9 p.m.

Luke Tepper

First-time dad Taylor Tepper asks parents and cooking experts for advice on feeding a family while maintaining your sanity. What he learns: Focus on formats.

Last week, I stood in the first aisle of my local grocery store for a few minutes blinking at a bin of scallions.

I had a cart in one hand, a shopping list in the other, and a podcast playing in my ear. I needed to grab a bunch of groceries, get home and make dinner.

But at some point in the produce section, I fell victim to a momentary lapse of cognitive function, as if I was a computer that had overheated. For a moment, I wished I had simply ordered in Chinese.

A parent’s day is long. Ours starts at 5:30 a.m. with a groggy baby and two sleep-deprived parents, and I don’t return home with dinner’s ingredients in tow until 7 p.m.

To be clear, I genuinely relish the responsibility of providing my family with sustenance. Plus I know there are real benefits to eating real food prepared at home: We can eat more healthfully and save a few bucks in the process.

But my problem is that I’m terrible at planning. I’ll look up a recipe before I head home from work, buy everything on the ingredient list (often forgetting that I have a quarter of the stuff at home), walk home and make the meal. On that day last week when I paused in front of the scallions, for instance, I ended up preparing a baked chicken dish with Kalamata olives, dates, tomatoes with an herb jus and mashed potatoes.

Delicious. Only, my wife and I finished eating close to 9 p.m.—at which point I devolved into a coma.

I know I’m wasting time and money. I need help. I need a plan.

So I turned to a few experts: KJ Dell’Antonia, who as the lead writer at the New York Times Motherlode blog has written on her successes and failures of cooking for a family, my friend Cara Eisenpress whose cookbook and blog BigGirlsSmallKitchen.com document dinner prep in a diminutive Brooklyn apartment, and Phyllis Grant, a former pastry chef whose blog DashandBella.com chronicles meals made with her kids.

The Game Plan

“Obviously I’m a big fan of planning,” says Dell’Antonia. “There’s nothing like realizing that it’s 4 pm and you’ll have to make dinner again tonight—but not only do you know what it is already, but you’ve got all the ingredients and maybe some prep work done. Saves my life every time.”

But what type of plan is best for a busy working parent like me?

Cara told me to forget about specific recipes and think more broadly.

“When planning, think in terms of formats,” she says. “Pasta, hearty soups, stir fries, roasted cut-up chicken, and eggs are all classes of weeknight dinner that are so simple to vary.”

In other words, rather than shopping for a pasta dish on Monday (like Lemon Fettuccine with Bacon and Chives) and then returning to the store on Tuesday in search of ingredients for for another (say Orecchiette Carbonara with Scallions and Sun-dried Tomatoes), plan on whipping up two pasta dishes and a chicken entrée over the next few days and then map out recipes from there. That way you’ll buy overlapping ingredients.

At the same time, though, be mindful of planning too far ahead, says Cara.

“Don’t shop for the seven nights’ worth of formats—you’ll waste food and money if something comes up,” she advised. “Better to plan out fewer and then grab a few miscellaneous staples that could turn into dinner as needed, like extra onions (caramelized onion grilled cheese), a box of spinach (lentil soup with spinach), or some bacon (breakfast for dinner).”

Grant even suggests preparing more than one night’s worth of a neutral protein like chicken, which she notes “can be a life saver, You won’t get sick of it because you can dress it up with some many different flavors and techniques.”

Most importantly, Cara said, make sure you have a stocked pantry—including olive oil, vinegar, mustard, salt, rice, pasta and cheddar, among others—to augment whatever recipes you’ve chosen.

The Defense Formation

After you’ve figured out the formats and recipes you’re interested in for the next couple of days, it’s time to actually buy the food.

But the grocery store is like a casino: The thing is designed to have you spend more time shuffling along the aisles so that you look at more food. They even mess with the music (see #19 here).

If you’re not careful, you’ll arrive home with a beautiful jar of jam that will sit in your fridge for the next six months. (Guilty!)

That’s why Dell’Antonia recommends shopping with a list, “and not buying anything that’s not on it,” says. “Ridiculously, I save money by sending my babysitter to the grocery store when I can. Her time costs me less than I’d spend in ‘Oh, look! Halloween Oreos!'”

Also, look for items that will make your cooking life easier, says Cara. “Don’t shy away from shortcut ingredients. Find brands of tomato sauce, salsa, stock, pre-washed spinach, ravioli, etc. that you like: each of those gets you a third of the way to dinner. There are some vegetables I think of as shortcuts too because they require so little prep: a potato you can rinse and then bake, and my go-to, fennel, where you just remove the outer skin, quarter what’s left, and roast to get a super simple serving of vegetables.”

Kickoff!

Time to practice my new strategy.

I replenished up my pantry—I was a little low on olive oil and pepper—and decided to prepare Chicken with Figs and Grapes from Grant’s blog. I even bought a little extra chicken and stock for some soup later in the week (guess I was in a chicken format mood.)

Her recipe calls for about a dozen different ingredients, but since my pantry is already full, I only need to pick up the chicken, anchovies, figs and grapes.

I’m in and out of my local grocery store in five minutes (without jam!) and before long my kitchen is humming right along.

The dish is relatively easy to prepare and after a little less than 30 minutes in the oven, my wife and I have a meal for tonight and tomorrow. I arrived home by 7:15pm and we finished eating around an hour later, about 45 minutes quicker than normal and nearly a Tepper weekday record.

Our stomachs were full, the kitchen relatively clean and my brain didn’t wither like a raisin during the process.

A sense of peace had been restored in my life.

Adulthood can be difficult—after a long day of work, it often just feels easier to order a delicious Korean BBQ kimchi burrito than expending the time and effort to put together a meal. So sometimes the Teppers do just that.

But as Cara says, “Cooking at home is one of the best parts of being a grown-up. You get to eat exactly what you want when you want it. So, if you like to eat, you like not spending all your money, and you like putting relatively healthful food in your body, you should probably learn to cook.”

And if you’re going to do it, plan ahead.

Taylor Tepper is a reporter at Money. His column on being a new dad, a millennial, and (pretty) broke appears weekly. More First-Time Dad:

MONEY Savings

How Blended Families Can Overcome Their Savings Obstacles

THE BRADY BUNCH
Unlike TV's "The Brady Bunch," real-life blended families often face big financial challenges. Courtesy Everett Collection

Remarrying brings special savings hurdles and leaves blended families further behind, new research shows.

The nuclear family went out of fashion 40 years ago, and what has replaced it is a far cry from TV’s blissfully blended Brady Bunch. Modern families include more same-sex, single-parent and multi-generational make-ups—and, new research shows, these households have special savings obstacles.

Today, just 19% of U.S. households are married heterosexual couples with young children vs. 40% in 1970, according to Census Bureau data. The rise of non-traditional families is reshaping household economics and, it seems, deepening the nation’s savings crisis.

Blended families, where parents have remarried with young children, are the biggest segment of the new-look household. About 75% of divorced people remarry. In roughly 43% of all marriages it is the second time around for at least one member of the couple, and 65% of remarriages involve children from a previous marriage. In such families, the average level of savings is $158,600, vs. $264,300 for traditional families, according to a new Love Family Money study from Allianz.

Only 46% of blended families believe they are on track towards their financial goals vs. 60% of traditional households. Some 55% of blended families live paycheck to paycheck vs. 41% of traditional families; and 30% of blended families say they are not saving any money vs. 20% of traditional families.

Behind this struggle, in many cases, is the financial stress of a broken household, Allianz found. Parents in blended families are more likely to say that they or their partner brought financial baggage to the marriage, and a third cite insufficient monetary support from their ex as a major problem keeping them from saving. They often find it difficult to merge their financial resources and plans, which means they tend to wind up with multiple, and frequently competing, goals within the household.

Some 35% say they and their partner have different financial priorities that are difficult to navigate. They are almost twice as likely to feel less aligned as a family than those in a traditional household. Yet there is some good news. Perhaps because they have a hard time planning as a unit, blended families are more likely to talk about money and take steps to teach their children to budget and save, Allianz found.

How can blended families overcome their struggles? With the rise of non-traditional households more financial firms are weighing in. It’s not enough to talk to the kids about money. Couples need to talk to each other and develop mutual goals and a plan for getting there. Agree on a fair distribution of responsibility. To get on the right path to your financial goals, start is by finding ways to trim your major expenses, then make a budget that leaves room for saving. If you can’t free up much cash to put away now, start small and increase that amount with future raises. It’s also important to take a careful look at wills and legacy planning, since you want to protect your family financially as long as possible.

More on marriage and money:

Retirement makeover: 4 kids, 2 jobs and no time to plan

7 ways to stop fighting about money and grow richer, together

Common money problems; uncommonly smart solutions

MONEY retirement planning

Americans’ Top 3 Excuses for Not Saving—and Why They Don’t Hold Up

Getting paid in peanuts
Rodolfo Arguedas—iStock

Truth is, most Americans can save more than they are doing right now. Here are three ways to make sure you reach your retirement goals.

Saving money is tough. So it’s no surprise that we come up with all sorts of reasons we just can’t save as much as we should. But are these legitimate excuses, or rationalizations? To see, I checked out the section of BlackRock’s 2014 U.S. Investor Pulse Survey that deals with reasons people find it difficult to save scrutiny.

When BlackRock, the world’s largest asset manager, polled a representative sample of 4,000 Americans earlier this year as part of its second annual look into financial behavior and retirement readiness, the findings weren’t exactly a revelation. Pre-retirees on average have accumulated a nest egg large enough to generate only about 15% of their desired retirement income, and even affluent pre-retirees (those with investable assets of $250,000 or more) came up short by roughly 50%.

Clearly, people just aren’t saving enough to give themselves a solid shot at a secure retirement.

To get at the question of why, the BlackRock survey queried people about a variety of financial obstacles that can interfere with building a retirement nest egg. Below are the three impediments that were cited most often, ranked by the percentage of respondents who identified each and followed by my advice on how to bolster your saving efforts.

1. “I don’t earn enough.” (47%)

There are some people whose incomes, unfortunately, are so low that every cent goes to living expenses, leaving nothing to save. And it’s also true that earning a higher salary, in theory at least, may be able to give you more wiggle room in your budget, making it easier to save.

But once you’re beyond the “scraping by” stage, the level of your income isn’t the deciding issue when it comes to saving. Witness the fact that 21% of affluent investors queried for the BlackRock survey also claimed that not earning enough made it hard for them to save. So for most of us, saving comes down to a choice: how much of our income we’re willing to set aside for a distant tomorrow vs. how much we prefer to spend on ourselves today. Given that we’re largely hard-wired for immediate gratification, all too often we go with spending over saving.

So how can we tilt the odds more in savings’ favor? One way is actively seek out opportunities to save. But a more effective strategy is to put your savings on autopilot by committing, say, 10% to 15% of your salary to a 401(k) or automatic investing plan. That way, you won’t have to constantly make a conscious decision to save, which, alas, too often ends up being a decision not to save.

2. “The cost of living is too high.” (46%)

The problem with this statement is that implies that the cost of living is a given, a financial fact of life over which we have absolutely no control. But this isn’t quite true.

Granted, we don’t have the power to set the prices for houses, cars, utilities, food and other goods and services. But we do have considerable maneuvering room when it comes how much we spend on many of these things. We can choose to live in a modest house or in a less expensive part of town (or, for that matter, a city with lower living expenses). We can drive an economy car rather than a Statusmobile. And we can certainly cut the percentage of our budget that goes toward food and entertainment by eating out less often or being more creative about how we spend our leisure time.

In fact, if you follow my suggestion above and allocate 10% to 15% of your income to saving right off the top, you’ll effectively force yourself to make these sorts of lifestyle compromises, as one way or another you’ll have to make due with the 85% or 90% of income you have left after your savings have been automatically deducted from your paycheck.

3. “I have unplanned expenses.” (33%)

This isn’t a bogus excuse. But let’s be realistic. We all know that life doesn’t unfold as predictably as a spreadsheet. So unexpected bills always have and always will be a part of financial life. So while we may not know exactly what these expenses will be or when they’ll appear, we know that some outlay we haven’t planned for—home and auto repairs, health-care costs, whatever—will arise at some point in the future.

If anything that fact should give us even more motivation to save. Why? Because creating a financial cushion can help us better absorb the unanticipated expenses we know will pop up sooner or later (usually sooner, it seems) and make it less likely that these unwelcome demands on our budget will wreak financial chaos.

I certainly don’t want to underestimate these and other obstacles most people face when it comes to saving for retirement. They can be daunting, and overcoming them can require real sacrifice.

But unless you’re okay with having your Social Security benefits determining your standard of living or you don’t mind running out of money before you run out of time, it’s important to find a way to rise to the challenge.

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MONEY Out of the Red

How I Paid Off $158,169 in Debt

G. McDowell Photography

Think there's no way to get out from under your obligations? This first in a series of profiles of people getting "Out of the Red" proves that it's possible.

Rachel Gause just wanted to give her three kids more than she had growing up. So, though she was receiving a secure income along with child support, she found herself living beyond her means every month—eventually racking up six figures in debt. With a whole lot of determination and almost a decade’s worth of belt-tightening, she’s climbed most of the way out. This is her story, as told to MONEY reporter Kara Brandeisky.

Rachel Gause
Jacksonville, N.C.
Occupation: Master Sergeant, United States Marine Corps
Initial debt: $179,625
Amount left: $21,456
When she started paying it down: 2006
When she hopes to be debt-free: November 2015

How I got into trouble

“I was just trying to keep up with everybody else. I’m a single parent to three kids, ages 10, 14, and 16. I was always spending extra on Christmas and on birthdays. Also, growing up, I didn’t have new clothes and new shoes at the start of every school year. But I wanted to make sure my kids always did.

Looking back, I wish I would have known not to rely on credit cards. I wish I would have known that it’s okay to keep your car for four or more years, as long as you maintain it.

I started going into debt when my first daughter was born, 16 years ago. I remember I had to get a furniture loan. By 2006, I had $55,848 in credit card debt and $76,711 in car loans. Then there were the personal loans. I had a consolidation loan that I used to pay off my credit cards. Altogether, it came out to $179,625.”

My “uh-oh” moment

“I wasn’t aware of how much debt I was in. The turning point for me was when I hit the 10-year point in the Marines, and I saw other people around me retiring. I wanted to sit down and see where I was at. And that’s when I realized I didn’t want to retire in debt. I didn’t want to be that person.

At the time, I had a Toyota Sequoia, and I couldn’t make payments on it. I knew I was in way over my head.

Even though I had three kids, we didn’t need that big truck. It was going to put my family at a financial challenge. So I spoke to a lady at my church, and I said, ‘I have this truck, and I’m going to trade it in for something smaller.’ And she said, ‘I always wanted a Toyota Sequoia.’ I sold it to her and got into a Corolla instead.

I realized buying that truck was a bad choice, and I knew I needed to develop better habits from there. That was my first step forward.

How I’m getting out from under

Now I put roughly $2,100 a month toward my debt.

For the rest of my income, I use the envelope system. Before I get paid, I do my budget. Then I have 13 envelopes—one for groceries, one for clothes and shoes, one for charity, one for dining out, one for gas, and so on. I go to the bank, take the money out, and divide it between the envelopes.

I don’t spend anything that doesn’t come out of those envelopes. Debit cards are nice, but swiping is less emotional. Cash makes me more aware of what I’m spending my money on. If I run out of money for something that month, I don’t buy it. But I’ve never run out of money for something important—now I’m more aware of how much I’m spending.

That’s because I also got a small composition book from Dollar General to track my spending. Every time I spend money, I write it in that book. Then I compare that to what I’m supposed to be spending, according to my budget.

I also do a quarterly audit on myself to make sure I’m not spending too much more on my cable or cell phone bills.

But it’s not all deprivation. We have a chart that we color in every time we reach a milestone, and we treat ourselves to something nice. For example, recently I went on a trip with my high school classmates to Atlanta—funded totally in cash.

My kids have been understanding about our debt-free journey. They know that mommy has made some bad financial decisions in the past. Now I teach them about needs and wants.

The other day, I was coming home from work, and I said, “Do you need anything from the store?” My son said, “We don’t need anything, but we’d like some candy.”

If they want a video game, they know they need to save their money to get that video game—and that means there’s something else they won’t be able to get. They understand if you have a big house, that means you have to pay big electricity and water bills. I’m teaching them to live within their means and not just get, get, get to try to impress people.

What I’ve learned that could help someone else

My advice would be to sit down, see where you’re at—first, you have to know how much debt you’re in—and then create a spending plan. (Some people are scared of the word “budget.”) You have to tell your money where to go, or it’s going to tell you where to go.

The numbers may scare you in the beginning. It takes two or three months before you can get the budget right.

And you have to be consistent. If you don’t put 100% into it, it’s not going to work. You can’t be half, ‘I’m trying to get out of debt,’ and half, ‘I still want to spend money.’ You have to sacrifice.

My hopes for the future

Once I become debt-free, I plan to build up my emergency fund and then start actively investing and saving for retirement.

Then I hope to get my kids off to a better start.

My daughter will go to college soon. We’ve talked about student loans.

The main reason I joined the military was to obtain my college degree for free. I earned my degree in business administration from the University of North Carolina-Wilmington last year. But while I was there, I saw so many kids taking courses for a second and third time because they were failing and they weren’t going to class.

So I told my daughter, you’ll pay for that first year, and we’ll see how you manage. Then I’ll assist you with your second, third and fourth years. But first, I need to make sure you’re dedicated.

After I retire from the military, I want to become a certified financial counselor so I can help people break the vicious cycle of being in debt and dying in debt. My passion is to put together financial classes for non-profit organizations like women’s shelters, churches, and organizations for military service members. There aren’t that many in this area, and I see a real need. I see so many people struggling to survive, living paycheck to paycheck.

I’ve already started counseling some people who ask for help.

Every now and then, I get a message on Facebook from someone I helped that says, ‘I just paid off another credit card’ or ‘I paid off my car.’ That’s my motivation now. I don’t want to stop – the need is out there.

Are you climbing out of debt? Share your story of getting Out of the Red.

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