When young Americans who want a family life imagine the future, they probably envision something close to the traditional American dream of getting married, having kids and living happily ever after. To the extent they do any long-term planning, the typical young adult figures there will be plenty of time to save for retirement while juggling work and family obligations.
But life doesn't always go as planned.
Sometimes fate intervenes, in the form of divorce, an elderly parent needing to move in, or an adult child "boomeranging" back to the family home in the face of a tough job market.
To gain a better understanding of how these life events affect the finances of various modern family units — including blended families and multigenerational households — we sought to understand their approach to family finances as part of the Allianz Love Family Money study.
In the study, we surveyed more than 4,500 Americans and found that even if the people living in these modern family structures are finding emotional support and joy in their new configurations, finances often suffer. Long-term planning may go on the back burner while the family tends to its members' more immediate needs.
Blended families — defined as parents who are married or living together with a stepchild and/or child from a previous relationship — for instance, have put aside an average of $157,800 for retirement, significantly less than the $251,100 of traditional families, comprised of a heterosexual married couple with at least one child under 21 living at home (the survey included people with a household income of at least $50,000 a year).
More than half of blended families (55 percent) say they "currently live paycheck-to-paycheck" (compared with 41 percent of traditional families), while nearly one-third (30 percent) cite one of their worst financial habits is "not saving any money." Just 20 percent of traditional families say they have that problem.
Only 46 percent of blended families said they are on track to achieve their financial goals, compared with 60 percent of traditional families.