In my latest Yahoo!Finance column I interviewed Sheena Iyengar, Columbia business school professor and author of The Art of Choosing, which looks at how people can make better choices. I asked her why she thought consumers make poor financial choices.

“Money is supposed to be meant for exchange but it’s come to be much more than that,” Iyengar says. “There is so much more baggage associated with it; we judge people based on how much or how little they have, or how they use it.

“We expect people to know how to be organized about its distribution in their lives but we don’t give people any training,” she continues. “On top of that, money is no longer tactile and concrete. It’s become something quite abstract and that becomes harder for us to see and experience its growth and shrinkage. When you put something on a credit card it feels very different than using cash. I think all of those things are involved when you decide how to spend your money.”

Another problem is the sheer number of choices. In a study for Vanguard, Iyengar found that the more investment choices a company 401(k) plan offered, the lower the participation rate among employees. Participation rates fell from a high of 75 percent for the smallest plans, which had four funds, to 70 percent for plans with 12 or more funds. When the number reached 30, participation began to slide again – to a low of about 60 percent for plans with 59 funds.

“It’s easy to sign up on the spot when you have only five choices, but when you have 50 it seems reasonable to mull things over for a while,” Iyengar writes. “Unfortunately, as you keep delaying the decision, and days turn into weeks, and weeks into months, you might forget your 401(k) altogether.”

If this is your situation, try the following simple steps:

1) Ballpark your retirement needs using this calculator from ESPlanner.com, a tool created by Boston University economist Laurence Kotlikoff. (It takes about a half hour to complete.) Don’t balk at doing the exercise because you’re concerned you can’t achieve the goal. Darthmouth economist Anna Maria Lusardi has found people who make an attempt to estimate their retirement savings goal ultimately save more than those who don’t – so the effort is worth your while.

2) Try to gauge your tolerance for risk using a tool like this one, from Rutgers University.

3) Bring the results of the two steps above, and the list of your 401(k) investment options, to a fee-only financial planner who charges by the hour to help you choose funds. You can find one at garrettplanningnetwork.com or napfa.org. Budget $100 to $200 for the effort.

4) Once you know how you’d like to allocate your savings, set a timetable and a specific  date for executing on the planner’s suggestions so you don’t let it slide. Contribute at least enough of your salary to get any match the company may offer. (I personally max out my retirement contributions.) If you can’t afford the max, make a commitment to increase your contribution by 1 percent every time you get a raise.

Tax season is a great time to reflect on last year’s spending habits and set new personal finance goals. Here are a few ways to get more bang for your buck by making small changes – from taking advantage of free and low-cost tax filing options to finding online deals and improving your company retirement plan.

1) Choose a high-interest checking account: If you’re someone who typically swipes their debit card 10 times a month, move your money to a high-interest checking account that pays 3 to 4 percent interest. You can find one on Checkingfinder.com. There are a few rules: You usually have to do one direct deposit a month, use online billpay and get your statements online. But many people already do those things, so you can earn extra cash simply by choosing the right account.

2) Look for rewards programs that offer more value. Rewards programs are up almost 20% since 2007. But often they’re about getting you to buy more product or come back to the same store. I’m working as a spokesperson with the folks at Tropicana on its new program called Juicy Rewards. Consumers can get up to $15 in immediate savings on 20,000 fun, healthy activities and products – things like museums, amusement parks, sporting events and gear, and even cooking classes and massage. You purchase a carton of Tropicana Pure Premium, go to Tropicana.com and enter the code on the carton. You can redeem rewards right away or bank points for later.

3) Simplify online searches. Research shows that most online purchases start with a search, followed by a second search for a discount or coupon. Now you can combine those into one. The website Billeo.com has a free toolbar called “Offer Assistant.” When you search for a product on Google, Yahoo or Bing, an icon appears, telling you whether a deal is available. So you find the product you want at a better value automatically.

4) Get more value out of your company retirement plan. Company 401(k) plans can range from the good the bad to the ugly – with high fees or bad investment choices. The website Brightscope.com reviews and rates large company 401(k) plans. If your plan is ranked poorly, click “Help improve the plan” to get specific steps to make your company 401(k) a better deal for employees.

5) Rein in prescription costs. Only one-third of prescription drug purchases are mostly or fully covered by insurance and prices can vary by as much as $100 for the same drug. Warehouse clubs and discount stores offer the most popular generic drugs for as little as $4 a month, and you can fill prescriptions at a warehouse club even if you are not a member. Also a number of states offer price-comparison websites; check with your state department of health to see if yours has a site.

6) File your taxes online for free. If you make $75,000 or less, go to irs.gov/freefile and file your return electronically for free. (It’s easy, and you’ll get your refund fast.) The program is a partnership between the government and 20 different tax software firms. See this Yahoo!Finance column for more on Freefile and other low-cost options.

7) Know where every penny goes. Whether you use pencil and paper, an Excel spreadsheet or a software program like Mvelopes.com (a site I use and write a column for), find a tool that tells you where your money is going every month. Then consider whether those spending choices honor your values.

Do you have simply ways to get more bang for your buck? Comment here or email me at laura at laurarowley dot com.

President Obama signed the $940 billion landmark health legislation today.  Among the changes that take place in the next six months: Parents will be allowed to keep their kids on their health insurance plans up to age 26; and insurers can’t deny coverage to children with pre-existing conditions. The rest of the provisions won’t phase in until 2014.

The Wall Street Journal has a helpful interactive guide to how the plan may affect you, and some steps to take ahead of the changes in coverage and taxes.  Meanwhile, action continues in the Senate on a companion bill that will make a number of changes to the new law, such as boosting the value of insurance subsidies.

That companion bill contains an important and long-overdue change in the federal student loan program. The government would make loans directly rather than guaranteeing loans made by private lenders, freeing up $60 billion in funding over 10 years to support the Pell grant program and other student aid. The bill raises the maximum value of Pell grants and makes its easier for college grads in low-paying jobs to repay their debt. See this New York Times summary for more info.

Now for something completely different…I’ve been blogging about career and money over at the Simply Stated forum on Real Simple. You can check out those posts here.

This guest post is contributed by Raine Parker, who writes a blog at www.accountingdegree.com/blog

If you are the saver and your spouse is the spender in your marriage, it’s often frustrating to watch your savings dwindle or disappear entirely with the purchase of the latest Louis Vuitton purse or a new set of golf clubs. Can you relate? What can you say to a spouse with a must-have-it-now mentality?

In my household, my husband is the spender and I’m the saver. One of his favorite things to spend our hard-earned money on is the latest tech gadget. At first, this was a sore point in our marriage, causing countless arguments about financial priorities. To our credit, we successfully talked this issue through and hashed out a compromise. Here are three talking points that helped us avoid money arguments and got us back on the right track financially.

• Let the budget be the bad guy. It’s not me telling you that you can’t buy the newest iPhone, honey; it’s the budget that we created together that says we can’t. Blaming the budget is a good way to eliminate the accusation that the saver is keeping the spender from getting what they want. Building a budget together is key so that the spender has a stake in sticking to it.

• Saving is future spending. This was a tip we learned through taking a budgeting course together, which did wonders for our finances. It helps if your partner knows they can always have what they want if they save for it, and that loading up credit cards with debt will only keep them from getting what they want in the future.

• Make promises to splurge in the future and keep them. If your partner has their heart set on something, promise that as soon as you meet your goal of saving, say, a month’s worth of daily expenses, you will immediately begin saving for what they want. This way, you both get what you want in the end.

My poor dog Sammy leaped over a snow bank the other night on her walk and did something to her paw; she started limping Tuesday night and by Wednesday was crying in pain. Wednesday is our vet’s day off, so we took her to an animal hospital about a half hour away.

The docs there shaved her hairy paw and didn’t find anything; they suspected it might be sprained. They gave her a morphine shot and told us to let her rest and call our vet in the morning. We were on our way 15 minutes later with a bottle of pain reliever to crunch up in her food. Bill: $259.

Ouch. On the bright side, this is one of those occasions that allows me to demonstrate my deep love for both my dog and my budgeting software! I rely on a subscription program called Mvelopes. (Full disclosure: I used to write a paid column for the site on successful budgeters. M & H readers can get a 10 percent discount on Mvelopes by clicking here.)

The beauty of the Mvelopes is that I plan out my spending for the month based on the old-fashioned envelopes system used by my grandparents’ generation. They would get their paychecks and put a specific amount of cash into physical envelopes (food, rent, utilities, clothing) and when the cash was gone, they stopped spending.

Mvelopes imitates this principle but with virtual envelopes linked electronically to your credit and debit cards, checking and savings accounts. I budget $500 a month in my grocery envelope; when I swipe my debit for $50 at the food store, the purchase shows up in a “new transactions” folder. I click and drag it into the groceries envelope, which goes down by $50, so I know I have $450 left to spend on groceries for the rest of the month.

So here’s the thing – I only budgeted $40 for the dog this month. That means I’m $219 in the red on my dog envelope. The beauty of Mvelopes is I can transfer money out of a range of discretionary envelopes, such as entertainment, clothing and eating out – to cover the unexpected expense. So we skip a trip to the mall or the movies, cook at home a little more this month, no big deal.

The bottom line: The money has to come from somewhere. When you match your monthly income to specific spending objectives in a disciplined way, you don’t have to turn to a credit card to cover the unexpected. Mvelopes lets me start with my paycheck in hand and allocate it to cover expenses in the month ahead — instead of spending for 30 days, adding it up, and looking backward at what I did. (And saying, “Uh oh, my next paycheck doesn’t cover what I spent last month.”)

Shifting money around to different parts of your budget as you move through the month is really hard to do with pencil and paper, or an Excel spreadsheet. Mvelopes, how I love thee, let me count the ways…

Forgive me while I wax poetic on another Mvelopes feature: The joy of saving for a quarterly or annual expense month by month, rather than getting socked in the financial jaw when the bill arrives. Let’s say I spend $1,200 a year for auto insurance. The insurance company will let me pay $100 a month or $300 quarterly – for a fat fee. I hate paying fees. It’s no way to get rich. So instead, I set $100 aside each month in the auto insurance envelope, and when the bill arrives, I have the full $1,200 to pay it off.

The software guides my decision-making. Instead of mindlessly looking at the balance in my checking and thinking, “Gee, I have enough dough to go to that new place in town with the girls for dinner tonight! Better buy new shoes so I look super fancy!” — I realize that the money in my checking and savings is not really cash. It’s a resource, and parts of it are already spoken for to pay future bills. That’s not to say I never go out or buy new shoes — I do plenty of both. It’s just that I budget for it in advance. I always know exactly where I stand with my money, and can make adjustments that reflect the way my financial life really is: goal-oriented, complicated, occasionally surprising — but because of Mvelopes, never messy.

And Sammy is doing much better.

How do you track your spending? Do you have a budgeting tool you love? Comment here or email me at laura at laurarowley dot com.