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 debt, no car payment, and no mortgage 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 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 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.
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.
With 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.'
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.
With 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 take 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 gone...it is gone.'
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.
Like anyone with simple maths skills, Wagasky was quick to realise 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 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.
Wagasky was dubious about joining a food co-op, but after three months, she realised 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.
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.