Two families find a little change can save a lot

— -- Bruce and Jennifer Pivnick slashed their insurance costs without reducing their coverage.

Mitzi and Jimmie Walker discovered that food cooked at home tastes as good as take-out and costs a lot less.

And in the course of 30 days as they lived on new, tight budgets, both families learned that small lifestyle changes can add up to big savings. Each family slashed spending, saving more than $1,000.

"The biggest challenge," Jennifer Pivnick says, "is overcoming your wants."

Like millions of families, the Pivnicks and the Walkers haven't saved much. Yet, at a time the economy is faltering, an emergency fund is vital, financial planners say.

The Pivnicks and the Walkers agreed this summer to participate in the Frugal Family Challenge, a project created by USA TODAY in conjunction with ABC's Good Morning America Weekend. With help from financial planners, both families agreed to try to live within a spending plan for 30 days, starting in early August.

The results are in, and they're impressive. Here's a look:

THE PIVNICKS

Bypass brand loyalty for best deal

Jennifer and Bruce Pivnick of Richardson, Texas, have never been big spenders. Jennifer, 34, says she can't imagine ever spending $5 for a cup of coffee. They rarely take vacations, and eat out only once a week.

In 2005, the Pivnicks moved from Southern California because they believed Texas was more affordable for their growing family.

Bruce is a regional sales manager for Clipper, a direct-mail coupon magazine (Clipper is owned by Gannett, which also owns USA TODAY). Jennifer has a home-based business selling custom-made rhinestone T-shirts and other apparel.

But while home prices are lower in Texas, their property taxes are higher. Energy costs are higher, too: In July, their air-conditioning bill topped $700.

Groceries are less expensive, but with four children, ages 3 to 13, the Pivnicks still spend about $1,000 a month on food. They've also been hit hard by rising gas prices.

Still, during the 30-day challenge the Pivnicks made some significant changes in their finances. They cut their expenses by more than $700 and saved nearly $1,000 for retirement.

To reach that goal, they:

•Changed auto and homeowners' insurance policies.

The Pivnicks had been with the same insurance company for more than 15 years. But once they started shopping around, they realized they were paying too much.

By switching to another insurer, they were able to reduce premiums for their home and vehicle insurance by $235 a month, without reducing their coverage, Bruce Pivnick says.

"We have the same insurance we had before," he says. "The deductibles are the same, and we're saving a lot of money."

•Switched cellphone plans.

Before they started the Frugal Family Challenge, the Pivnicks were spending more than $500 a month on cellphone bills. They had five phones on one plan, and routinely exceeded the 4,500 free minutes available each month. Once they exceeded that amount, they paid 40 cents a minute.

Now, the Pivnicks have two plans.

Bruce, who uses his cellphone for work, has one with unlimited minutes. The rest of the family has a plan with 3,000 minutes a month. Since Bruce used 90% of the minutes under their old plan, Jennifer is confident the rest of the family will stay well under their monthly limit. Under the new cellphone plans, the Pivnicks will spend $50 more each month on their base charges. But by eliminating penalties for extra minutes, they expect to save about $140 a month.

•Boosted their retirement savings. Bruce started contributing to his new employer's 401(k). He put $992 into the plan.

•Cut other expenses. The Pivnicks got rid of their yard service, which will save them $185 a month. Bruce cuts the lawn now. The grass "is a little bit longer, but it still looks good," he says. And by switching to store brands when they're shopping for groceries, they shaved $125 from their monthly food bill.

The Pivnicks made other changes that should improve their financial security.

Financial planner John Kvale in Dallas helped find a tax preparer to file their 2007 tax return. The Pivnicks are expecting a $7,000 refund, some of which will go into an emergency fund.

The Pivnicks also switched to a budget plan for their electricity bill, which spreads the costs out over 12 months. Instead of getting a $700 bill for August, they paid $345. This change won't save them money, but it will make the bills easier to manage. Finally, the Pivnicks saved $74 in late fees by paying their bills on time.

During the 30-day challenge, the Pivnicks cut their expenses by $759 and saved $992, for a total savings of $1,751.

The toughest part of the challenge, the Pivnicks say, was finding the time to shop for lower-cost service contracts. Jennifer says she spent several hours on the phone with cellphone and insurance providers. Completing all the paperwork was time-consuming, too. But the payoff was worth it, they say.

With so many companies competing for business, Bruce says, "You can't have brand loyalty. It's about the best deal."

THE WALKERS

Fewer trips to mall, restaurants

At the beginning of the Frugal Family Challenge, financial planner Timothy Wyman in Southfield, Mich., gave Mitzi and Jimmie Walker a small notebook and instructed them to write down every expense, from mortgage payments to breakfast at McDonald's.

The Walkers, who live in New Haven, Mich., say that exercise led them to think about the difference between their wants and needs — a crucial distinction when it comes to saving money.

Keeping the journal, "became like a game," says Jimmie, 30. "You didn't want to enter any 'wants' into your journal."

Mitzi, 28, agrees.

The journal, she says, "was very helpful because it gave you a chance to look back and see where your money was going. And it also alerted you … that your money didn't need to go where it was going."

Before the Frugal Family Challenge, the Walkers spent more than $700 a month on restaurant and take-out food. Sometimes, they ate out several times a day. Mitzi also enjoys buying clothes for their three children, while Jimmie has a weakness for high-end electronics.

But with another child due in December, the Walkers needed to curb their spending. They also have more than $30,000 in credit card debt. And they'd like to save enough to pay for their annual trip to Memphis, where both have family. Airfares and hotel rooms usually cost more than $3,000.

The Walkers were able to save about $1,000 during the 30-day challenge. To do that, they:

•Cut back on restaurant meals and trips to the mall.

The Walkers estimate they saved about $540 by cutting back on take-out and restaurant meals. When they did spend money, they tried to be more thoughtful about what they spent. Mitzi says she couldn't resist buying new school clothes for her children. But this year, she waited for a sale and spent about $100 on outfits and shoes. That's about half of what she ordinarily spends for back-to-school clothes.

•Reduced cellphone costs.

Jimmie sold his iPhone on eBay. That will save the Walkers $68 a month in iPhone service charges.

•Added to their savings.

During the 30-day period, the Walkers contributed $100 to a college account and $280 to a retirement plan.

•Changed their satellite TV service.

Going with a different plan will save them $17 a month.

The Walkers cut their expenses by $628 and saved $380, for a total savings of $1,008.

Mitzi says the family still eats out occasionally, and after the 30-day period ended, they slipped into their old big-spending ways for a couple of days. But now that they've resolved to pay off their debt, she says, it's easier to get back on track.

"Not eating out has been a real eye-opener for me," she says. "I saw how much money we could save."