Frugal Family Challenge: Can They Cut Costs?
Could you change your spending habits for a month? Watch these families try.
Aug. 26, 2008 — -- As part of the Frugal Family Challenge, "Good Morning America Weekend" and USAToday followed two families, the Pivniks and the Walkers, as they attempted to change their spending habits for a month.
By some estimates, 50 percent of families don't have a family budget of any kind. But getting a handle on family finances can result in big savings, so we offered them help from a financial planner to get them started.
Over the course of the challenge, we filmed both families' progress as they put their new money saving tips to work. On "Good Morning America Weekend" this Saturday, we'll reveal how much each family saved.
Click here to see the latest videos.
Meet the Families
For thousands of American families, the idea of a budget is great, but actually getting there is a little daunting.
"We never had a budget before," said 34-year-old Jennifer Pivnick. She and her 43-year-old husband Bruce live in Richardson, Texas. They have four children, ranging in age from 3 to 13.
Click here to read more about the Pivnicks and to offer them advice.
With higher gas prices, rising grocery costs and a stagnating economy, many, such as the Pivnicks, find themselves with no other option than to put their family on a financial diet. But as with any diet … where should they start?
Our other Frugal Family challengers are Mitzi and Jimmie Walker, who live just outside Detroit with their three children, all of whom are under 5, plus a new baby on the way in December.
Click here to read more about the Walkers and to offer them advice.
We set out to help these two big families chart their expenses, see how much they can save, and find out whether they can actually stick to a monthly budget.
"I just wanna be taught," said Bruce Pivnick. "I want those tools."
The two families' biggest worries were getting loans under control, trimming phone bills and capping miscellaneous spending. After that, they hoped to be able to save for college and retirement.
"I think a problem is knowing what we need and determining what we need and what we want," said Jimmie Walker, 30.
To help them, in addition to teaching them how to build a budget and stick to it, we set up each family with a financial planner to teach them where they can cut back and save.
"Unfortunately, many folks, Americans, do not have a budget or a spending plan," said Tim Wyman, the financial planner who worked with the Walker family. "When you don't have a budget, you really don't know where the dollars are going, and it doesn't allow you to make good, honest decisions on where the dollars should go so you can accomplish many of the financial goals that you might have."
Wyman found holes in the Walkers' budget and pointed them out.
"When I look at your budget, there's $500 unaccounted for," he told them. "Where are we creeping? Where are we losing some money?"
Wyman pinpointed the following areas of concern in the Walkers' budget:
At least $700 in dining out costs a month.
Hitting the mall every weekend and spending on knick-knacks and items for the new baby.
Phone bills for two cell phones and a landline.
John A. Kvale, the advisor who worked with the Pivnicks, said that changing their financial ways would come with time.
He told them to consider "that old saying ... 'How do you eat an elephant? One bite at a time.' Just take one bite at a time, and if you get frustrated … just back up. We'll take another bite and we'll get it taken care of."
Here are the areas Kvale pinpointed as problematic for the Pivnicks:
Need to pay closer attention to filing their taxes.
Need to cut down on miscellaneous spending, such as coffee and lunch on the road.
Phone bill for the family cell phone is through the roof at more than $500!
For the Walkers and the Pivnicks, it's not going to be an easy road to get it all under control. And over the next 30 days, we'll see how each family does.
"We're gonna save roughly $500 over the next 30 days," Wyman told the Walkers. "Are you up for the challenge?"
"Wow," responded Jimmie. "All we can do is try. "
His wife, Mitzi, shared his concern.
"It's gonna be hard," she said.
The Pivnicks have the same goal.
"They're on the clock, so to speak," Kvale said. "And by being on the clock, they're held accountable."
Now, it's all in the Walkers' and Pivnicks' hands.
"I badly want it to work," Jimmie Walker said. "I mean, this is a month-long process ... but I wanna stick it out."
"We know all of these things need to be done," said Jennifer Pivnick.
To which her husband Bruce reassured, "We'll get it done."
Over the next month, these two families will keep a video blog to document their progress.
To view their video blogs and to post your comments, click on:
Click here to see the families' vlogs.
You'll, also be able to learn more about the Pivnicks and the Walkers in USAToday. Read the article in Monday, Aug. 18's paper.