It seems like everything on television is a competition. Cooking, decorating, and weight loss challenge programs have turned kitchens, living rooms, and workout rooms into battlefields. Thankfully, there are people who are taking a more realistic approach to this “reality” trend. The Lose To Win: Financial Edition makeover competition sponsored by E Federal Credit Union (EFCU) in Louisiana combined practical professional help with unmatched participant dedication to achieve remarkable results.

In early 2009, Kristi Smith, a single mother of two from Walker, LA, was drowning in debt with little savings and little hope. A recent divorce and undisciplined personal spending left her with mounting debt. Smith decided to take a chance at a fresh start by entering the makeover competition.

With the help of her financial coaches, Anna Lafitte of EFCU and MMI’s Valerie Jenkins, Smith and her two children, Shelby and Kalyn, were named the competition’s winner by losing more than $22,000 in debt and saving over $12,000 in eight months. She competed with three other families to see who could reduce debt and increase savings by the greatest percentage during the contest that ran from February through September 2009.

“I can’t believe we did what we did! The numbers we produced in these 8 months were simply overwhelming. I never in my wildest dreams would have ever imagined being able to eliminate $22,000 in debt while saving $12,000 at the same time, “said Kristi Smith. “Our family has made large strides to getting ourselves out of an ugly financial mess, and we can hold our heads high with pride, knowing we did what had to be done to change our future.”

Throughout the competition, each family met at least monthly with their financial coaches to discuss ways to improve their financial situation by reducing their spending habits, increasing their earnings, and living more financially sound lives. In addition, the families participated in quarterly financial seminars.

All of the participating families made real and significant improvements to their financial outlook. Combined, the four families made a financial swing of more than $80,000 in just eight months. For details on how they did it, check out LoseToWinFE.com where the families’ journeys were chronicled weekly through online videos and blogs. Event organizers hope that the success of the four families will inspire others to improve their own financial lives. Are you inspired?

Kristi Smith (left) hugged by one of her financial coaches, Valerie Jenkins of MMI/CCCS.

I’ve always had issues with the word save whose dictionary definition includes “To spend less by (save 25 percent).” You see, I’ve always thought that advertisers were just being clever when they tell you that you can “save big money” by buying their products. In fact, “you can’t save money at a sale” is one of my go-to soundbites. Thankfully, a recent article in Self magazine taught me how you actually can save money at a sale. From the November issue:

Make your virtual savings real
If you buy a $100 jacket on sale at 50 percent off and pay $50, have you saved $50? Of course not. (But you already knew that, didn’t you?) Yet many people succumb to the notion that “a bargain ain’t a bargain unless you buy it,” as if the savings from a discount were as tangible as money spent, says Peter Tufano, Ph.D., professor of financial management at Harvard Business School in Boston. To make your savings concrete, jot down the amount of the discount—$25 off your new Flip cam, for instance—then transfer that money directly into your savings account. This time, you’ve truly saved $25.

I wish I had thought of that! (Actually, that is how I feel every time I read the work of MP Dunleavey.)

I read a lot of magazine articles about money saving tips, but this tip stood out for a number of reasons:

-You’ll think before you buy. It seems as though things look better when they’re on sale. A dress you would never consider for $100 might look very attractive at $30. (70% off seems to be my breaking point—I lose all perspective!) With this new savings strategy, you are still committing to $100, so you’re likely to view things more realistically.

-You’re rewarded twice. Getting a great deal on something you love can be rewarding, but the comfort of knowing that you have something set aside for emergencies is valuable too. By stashing your savings, you’ll get the best of both worlds.

-The New Year will be off to a great start. There is a sale for every occasion and the upcoming holiday season is no exception. By making your virtual savings real, shoppers won’t be able to help saving. If you have trouble sticking to your stashing, try imagining how great it will be to start the New Year with savings instead of debt.

Speaking of debt, I should mention that this savings strategy only works if you’ve got the money to spend and save. As a general rule, charges should not be put on a credit card unless the balance can be paid in full when the monthly statement comes in. Remember, financing purchases—even if they’re on sale—is rarely a bargain.

When faced with a financial crisis, it is tempting to look to your long-term savings to ease the immediate burden. However, the solution might be worse than the problem. Tapping your retirement money early could tarnish your “golden years.” In addition to causing stress, cashing your retirement plan early is costly.

If you withdraw money from your 401k, you will likely have to pay tax plus a 10 percent penalty on any money withdrawn. This total tax bill will probably come to about 37 percent of the money you withdraw. Even your credit card companies don’t charge an interest rate that high. As an example, if you withdraw $10,000, you will probably only realize around $6,300.

Borrowing money from your 401k account can also be a risky move. Long-term plan loans usually charge the prime interest rate plus one or two percentage points. In fact, it could cost you more than the stated rate. Say you borrow from your plan at 7 percent but the cash you pull out has been earning 9 percent in the stock market. You are losing out on the additional earnings and future compounding on these lost earnings. Another potential problem is that if you quit or lose your job, your loan may be due immediately. This would be at a time you are least be able to pay back the loan.

Before you put your financial future at risk, consider the following alternatives.

-Borrow from yourself. While cashing your IRA is not desirable, you might be able to take a short-term loan with no penalties. The only requirement is that you pay back the entire amount borrowed within 60 days.

-Take a good look around you. Most likely, there are many things in and around your home that you could sell for cash. Also, if you have the room, consider taking on a boarder.

-Seek employment. Secure a temporary job to help you through this set-back; even if it is not in your field of expertise.

-Use all available resources. Research all sources of cash. For example, you may have a life insurance policy with a cash value. Collect on monies lent to family and friends.

Finally, if you must access your retirement funds, consult with an accountant about your rights and responsibilities. The IRS does recognize some legitimate reasons for hardship withdrawals. The person applying for a hardship withdrawal must show an “immediate and heavy financial need” and have no other source of cash.