Middle-Class Family's Financial Makeover

May 28, 2008— -- Like millions of American families, the Seftons are struggling to get by and think saving money is not an option right now.

Instead of looking toward retirement, these middle-class baby boomers are overwhelmed by their finances, living paycheck to paycheck.

"I just can't see how anybody can save and put their kids through college," said Karen Sefton, who has two college-bound teenage boys at home, with her husband Mike.

Together the Seftons earn about $75,000, placing them in the middle class alongside more than half of Americans, who earn between $40,000 and $100,000.

They are also part of the two-thirds of families who say they are not financially secure.

Karen Sefton, a mortgage broker at a local bank, is the family breadwinner. Husband Mike, after working 30 years as a union laborer, retired last year and now receives a pension. The loss of an additional income has been tough on Karen, who already runs a pretty tight ship with few frivolous expenses.

"It's hard, it really is. … On the norm, we don't use the credit cards for things other than the big-ticket items," she said.

Here's a snapshot of what the Seftons owe:
$59,000 on their mortgage
$4,500 on a second mortgage
$12,500 on their car
More than $13,000 on their credit cards
Total Debt: about $89,000

With less than $2,000 cash in the bank, the family can't count on their savings, either.

To help them get back on track, "Good Morning America" brought in financial strategist Michael Farr.

Farr, the author of "A Million Is Not Enough," showed the Seftons how they can save hundreds, make a realistic budget and work toward their dream of paying for the children's college.

First up, Farr tackled unnecessary expenses, like eating out.

"You do coffee breaks?" Farr asked.

"No coffee, just the bagel break," Karen said.

Farr explained to Karen that by taking her lunch from home, she can save up to $60 a month. And if she skips the bagel that's another $43. He also encouraged the Seftons to eliminate family dining out to save about $240 each month. Those two fixes amount to an impressive $343 a month.