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How a Family of Four Manages to Live Well on Just $14,000 Per Year

Posted by on Feb. 26, 2013 at 8:02 PM
  • 16 Replies

How a Family of Four Manages to Live Well on Just $14,000 Per Year

In the years since the recession, the median household income in the U.S. has dropped to just over $50,000, while fixed costs like health care, higher education, and housing have only soared. Now imagine trying to support a family of four on a fraction of that income.

It's a reality that stay-at-home wife and mother of two Danielle Wagasky has lived for the last four years. And, perhaps a little surprisingly, she wouldn't have it any other way.

Wagasky, 28, lives with her her husband, Jason, 31, and their two young children in a three-bedroom family home in Las Vegas, Nevada. While Jason, a member of the U.S. Army, completes his undergraduate studies, the family's only source of income is the $14,000 annual cost of living allowance he receives under the G.I. Bill. Despite all odds, the family has barely any credit card debt, no car payment, and no mortgage to speak of.

Wagasky has been sharing her journey to living meaningfully and frugally on her blog, Blissful and Domestic, since 2009.

She was kind enough to chat with BI and tell us how she makes it work.

Wagasky finds inspiration everywhere from the library to tips from readers on her blog.

Amazon"My husband told me he'd heard about this book, [America's Cheapest Family Gets You Right on the Money]," she said. "We talked about it over the phone and I read it and thought how it could apply to us."

The couple had a single savings goal in mind –– scraping together $30,000 for a downpayment on their home in their native Henderson, Nevada.

The mindless spending was out, and Wagasky came up with a budget she could make work. "I changed the way I was grocery shopping and started working my way up, " she said.

She stopped eating out and learned how to cook.

Wagasky barely knew her way around a kitchen when she started her money makeover.

Now she's an avid cookbook collector (she checks them out from libraries or asks for them as gifts to save), and it's one of the simplest ways she's managed to cutback on spending.

With a $7 bread-maker she scored at a local thrift shop, she never spends on store bought slices. She's not shy about professing her love for wholesale stores like Costco, which is her go-to source for baking ingredients.

Everything in the home is either hand-sewn and or made from scratch.

seth w./Flickr"Everything must be budgeted," Wagasky wrote in a June entry on her blog. "From family outings, to toiletries to clothes purchases. It must be budgeted."

And she takes Do-It-Yourself to the extreme. Everything from laundry soap and clothing to the kitchen her husband installed in their new home was either crafted by hand or thrifted.

She swears by this home-made laundry detergent recipe.

The family swapped cable for Netflix and Hulu.

When it come to cutting costs, cable was as easy luxury to part ways with.

With two children aged 6 and 8 to entertain, Wagasky invests $14.99 in a Netflix plan and recently added Hulu to the mix.

The family also uses a simple antennae to pick up basic cable channels.

She goes to the grocery store once per month, pays cash, and never goes over budget.

REUTERS/Mario AnzuoniWith a single source of fixed income, there's no room for impulse purchases in the Wagasky household.

They budget $400 for groceries each month and that's it.

"Once that $400 is gone, it is gone," she writes. "There are no extra shopping trips made because there is no more money."

They are a cash-only household but keep a credit card for emergencies.

Wagasky said they have no credit debt, but they do charge emergency expenses on plastic when absolutely necessary.

"We recently had some medical bills we had to pay, and we were able to take our savings and pay those down as fast as we could," she said.

They fill up their tanks once per month and combine errands as much as possible.

REUTERS/Pichi ChuangWith gas prices creeping higher each all the time, the Wagaskys watch their mileage like hawks.

That means combining errands together and doing all they can to make one tank of gas last a month.

"We know we don't get to drive and visit family often, so when we do we cherish it," she wrote in a blog entry.

"We don't go just for an hour, we stay and visit and even run errands that may be close to where we have family. We try to remember that when the gas is is gone."

They paid for both of their cars in cash and have no car payments.

After Wagasky's husband left active duty and started school, the couple knew they would only have $14,000 per year to live on.

So they paid off the $8,000 he owed on his truck while he was earning more and they could afford the expense.

They also bought a van, which they saved $10,000 for initially and were able to pay the remaining $12,000 owed within a year.

Having zero car payments is a nice relief.

She skips all kiddie snacks in favor of healthier, cheaper DIY options.

AP Photo/Brennan LinsleyLike anyone with simple math skills, Wagasky was quick to realize how much cash she was wasting on prepackaged snacks for her children.

She cut them out completely and whips up homemade granola bars and trail mix instead.

If she can freeze food, she will.

If you're on a tight food budget, your freezer will become your best friend.

Wagasky chops vegetables and fruits and freezes them for a month. She actually does the same for dairy products like cheese, butter and yogurt.

"I am able to freeze about 8 gallons of milk each month," she writes. "They sit at the bottom of my freezer and we thaw them out when we need them." Baked goods get the same chilly treatment.

She uses a food co-op to save on fresh produce.

REUTERS/Mario AnzuoniWagasky was dubious about joining a food co-op, but after three months, she realized she would never beat the savings or quality she found.

Food co-ops pool membership fees together in order to fund a monthly harvest that's distributed at designated pick-up points.

A couple of times per month, Wagasky gets a basketful of in-season produce for $15 –– way better bargain than she'd ever find in stores.

They took advantage of Nevada's declining housing market to score a cheap foreclosure.

By the time Wagasky's husband came home from Iraq, they had managed to scrape together the $30,000 they needed for a downpayment on a home.

"But we decided the best option would be not to have a mortgage payment at all," she said. "We found a fixer-upper that didn't have a kitchen ... and we paid cash."

Price tag: $28,000. With the leftover cash, they were able to finish the kitchen and install wood flooring throughout the house.

by on Feb. 26, 2013 at 8:02 PM
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Replies (1-10):
by on Feb. 26, 2013 at 8:08 PM
Lord we couldn't live off that per person... Times 2. No thanks!
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by on Feb. 26, 2013 at 9:04 PM

No thanks.  While I think that it is admirable that they manage to live within their means while attending school, I wouldn't call it living well.  I didn't notice any mention of health insurance in the article.  DId I miss it?

by on Feb. 26, 2013 at 9:49 PM
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While neither DH nor I have children at home any longer, we live ~ well ~ on far less. Our home was built by us, as we could afford it. Our land is paid off. I don't go grocery shopping at all ~ we have a garden, and orchard, and meat and dairy animals. I can and dehydrate food in season, process our meat, and make things like cheese, yogurt and butter. I also grow a good bit of the food for our animals now, a little more than half. We generally drive to town once a month. I order cooking 'basics' such as baking powder, br sugar, etc. from a company that packs long term storage food, on a set budget, and they deliver once a month (I can change, substitute things at any time).

We have NetFlix and a landline internet package, and insurance payments each month, but that's it. We have a well, a septic tank, and solar power (with several backups). All together we spend between $300-$400 a month. Most of that is animal feed. I have, at any given time, food to last a year or more. I bake, I precook and freeze 'convenience meals', we have homemade pizza when we feel like it, and I can copycat just about any restaurant food into a far healthier version (thanks to the www the recipes are available). I do purchase tea, coffee, etc. Our income is roughly the same as what this couple brings in, and most of it goes straight into savings.

Since I have RA and SLE there are days when I would never want to get dressed to go to work. I don't have to ~ my animals don't care and the garden doesn't have a dress code. Other than caring for the animals, if neither of us feels like doing a blessed thing, we can sit on the porch and drink coffee or ice tea and do ... nothing. The time I spend in the kitchen canning or otherwise processing food for storage is far less than what I would spend even at a part time job, and with none of the extra costs. It's on my schedule, and no one is here to tell me I'm late. When I look back at the frantic years of jobs, second jobs, running every day to a different place, etc. I just shake my head. When I look back at the dollar amounts involved, I actually shudder ~ and since I didn't make a lot of money I still didn't spend the amounts I see women here talking about daily to raise three boys. I prefer living to blowing my life earning a living.

by on Feb. 26, 2013 at 9:49 PM
I think if you are frugal, and dont need material things to be happy, its great. I totally could have been a pioneer woman, if they had better medical care back then lol.
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by Bronze Member on Feb. 26, 2013 at 9:55 PM
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Her life sounds difficult, stressful, and no fun at all. No thanx.
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by Member on Feb. 27, 2013 at 6:41 AM

no, that would not happen in this house.  Also, if they do not have medical insurance(it seems that they do not) they are not living well.  Anything could happen that would devestate them and put them in financial ruins.  I definitely could not live like this

by on Feb. 27, 2013 at 6:43 AM
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What about retirement? Doesn't seem like a life I would enjoy.
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by on Feb. 27, 2013 at 8:09 AM
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I would not say they are living well, but more like they are surviving.

by on Feb. 27, 2013 at 1:47 PM

LOL, family of 8 here..... six kiddos and we do relly well, but that is too extreme for me.

by Member on Feb. 27, 2013 at 2:02 PM
We're working on doing a budget and doing some of that now. I know we overspend and it'll take some work to get where we need to be.

It's pretty awesome though that they do all that and such.
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