Families Relying on More Money Smarts to Get By

Keeping up the savings won't be possible now while Nate seeks a new job. The discipline gained from recent years should help, however.

"We're not alone," Stacy says. "We'll make it."

Paying down debt also was essential for Chris Palmer of Buffalo, N.Y. However, her job as a bank teller was reduced to part-time and then eliminated.

She used to put car maintenance and lots of other unplanned expenses on her credit card. She also routinely lent money to family members, without ever getting it back. Eventually, Palmer, who is 53 and single, had debt of $18,000 and she could barely afford to pay the monthly charges.

Palmer sought out a credit counselor a few years ago and worked out a plan to pay off her debts. It took getting a second job as an office cleaner; learning to say "no" to relatives; and spending on nothing but necessities — not even Christmas gifts. But by this year, she finally had all her debt paid off.

Palmer has only been working part-time, so saving is on hold. She has reduced her expectations as well as her lifestyle, figuring she'll need to work until she's 70.

"It's tough for me," she says, "but I have every confidence things will get better. Once I get another day job, my goal is to be a saver again. Right now, I really can't be worried about tomorrow."

For some, learning that they don't have to be a financial do-it-yourselfer is a critical step toward long-term stability.

A retired banker, Donald Pederson thought he and his wife, Joan, had nothing to worry about financially until three years ago. The Edina, Minn., couple were living off the dividends from financial stocks, such as Wells Fargo, figuring they were ultra-safe.

Then those stocks cratered in the financial crisis, the dividends disappeared and their portfolio shrank by 60% within months. "It felt like a whole new life," he recalls.

Pederson, 74, knew they needed help. The autopilot approach wasn't working. He sought out a financial planner who diversified the portfolio so it could withstand market plunges while still providing income.

"My life is stabilized because I don't worry about what I'm going to do any more," he says. "Life's a little more serene now."

When financial stocks tanked again recently, Pederson didn't fret.

Ted Contag of Thrivent Financial, who works with the Pedersons, says more people are seeking advice because "the world is more complex, more volatile."

Whether the new discipline sticks remains to be seen. In the past, savings have ebbed and people have abandoned caution about accumulating debt when the economy booms.

But a return to the free-spending, free-charging era of five to 10 years ago seems unlikely any time soon; especially as job growth remains too weak to lower the unemployment rate, and consumer confidence remains near a two-year low.

There is little doubt, though, that Americans will be better off in the long run because of this increased belt-tightening, savings and financial self-scrutiny. All of these steps will help move many away from the potential disaster of living paycheck to paycheck.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.