‘We have zero savings’: Family’s familiar struggle

>>> we're back now at 7:42 with a new series we're calling "issue number one, the economy." according to a recent gallup poll it is the most important issue facing the country, and with many families struggling to pay bills and save money, it could be the deciding factor in the presidential race . here's "today's" financial editor jean chatzky.

>> reporter: living paycheck to paycheck in phoenix. the dibburn family is struggling to make ends meet.

>> we've made the best of what we can because we're a family, but it doesn't mean that it's not difficult every day. you still like that one.

>> reporter: parents of four adopted children, dawn and walter used to feel they had it all, a beautiful home they owned, two cars and enough money to take the kids on vacation.

>> in 2008 things started to go down. we cleaned out our 401 which we had over $40,000 in, and we kept trying to hold on to our house.

>> we're basically cold off everything we own just to keep it going.

>> reporter: a car mechanic by trade, walter took a significant pay cut during the financial crisis .

>> i was there for 28 years before all this happened and then had to find a different job because it wasn't paying enough, and it's still not paying enough.

>> reporter: the most painful sacrifice, losing their home to foreclosure.

>> she looked like mini mouse. the kids said i just want to go home, mom. it just breaks my heart.

>> reporter: david kelly , an economist for jpmorgan funds, says we now have an hour glass economy.

>> the middle is getting squeezed and people are moving up and moving down, but staying in the middle is pretty difficult.

>> reporter: even though walter works 12-hour days, the family has not found a way to start saving again.

>> i don't have time to think about saving. i couldn't even find six cents to save if i had to.

>> we don't make enough money to save anything.

>> no, we don't. we have zero savings.

>> reporter: in the upcoming presidential election they are looking for a leader that can show those they call the real people how to move forward financially.

>> you hear about the stock market . you hear about $8 billion going out of the country. those aren't numbers that mean something to my family. $168 to get groceries to get through the week, those are the numbers that mean something to my family. the $20 a day in gas that it takes me to get my kids to school every day. i want to know how to go forward from 2012 .

>> jean, good morning.

>> good morning.

>> i would imagine a lot of people watching are either in the exact same situation the dibburn family is in or know someone who is. without getting into the specifics of their financial situation, what general advice can you offer them in.

>> two general pieces of advice. if you can't say or can't find the money you have to work the other side of the equation which means you've got to work on income. she's home with the kids. maybe a part-time job is possible. maybe taking someone else 's kids in is possible. the second thing to keep in mind, there is a tax break called the savers credit which for lower and middle income families is a dollar for dollar reduction of the taxes that you pay for putting money into an i.r.a. or 401(k). it's worth about $2,000 a year.

>> and it struck me when she said we can't even save six cents. i mean, this is a family really struggling. you have some tips now for people who possibly can save a little. the first is save before you spend. it sounds obvious.

>> it sounds obvious. the problem is we are so focused on the here and now that if the money lands in your checking account , you're very likely to spend it. you've got to get it out of there before it lands into a 401(k) and i.r.a., somewhere where you're not going to touch it.

>> and prioritize your savings.

>> right.

>> we work in an order. we do our emergency cushion first and then we do anything that gives us matching dollars and then the accounts that give us tax breaks and finally discretionary accounts if they have the ability to do more.

>> and you want everyone to set a realistic percentage of savings per month. what would that be for a family struggling to make ends meet is this.

>> start low. financial experts say all the time saturday 10%, 15%, like a crash diet , people fail. start with 2% and ramp it up sl slowly.

>> opportunities are few and far between these days. jean chatzky, appreciate it.