Skip Nav
6 Ways You Can Get Your Coworkers to Like You
Remote Productivity: How to Stay Focused While Working From Home
5 Things I Wish I Knew Before Becoming a Full-Time Freelance Writer

How to Raise a Family on a Small Budget

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

If you think you've got it hard, then try to stretch $14,000 among four people like this woman, featured in the Business Insider, is doing with her family.

In the years since the recession, the median household income in the US 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. 

Related: 13 Things You're Better Off Buying Used

It's a reality that stay-at-home wife and mother of two Danielle Wagasky has lived for the last four years. 


 Wagasky, 28, lives with her her husband, Jason, 31, and their two young children in a three-bedroom family home in Las Vegas, NV. While Jason, a member of the US 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. 

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.

The couple had a single savings goal in mind — scraping together $30,000 for a down payment on their home in their native Henderson, NV. 

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.

Read on for more.
She stopped eating out and learned how to cook.

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 cut back 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.

"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.

With two children aged 6 and 8 to entertain, Wagasky invests $14.99 in a Netflix plan and gets one DVD per month and all the streaming she wants. 

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

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."

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

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.

"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.

"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."

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

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.

Like 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.

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.

Wagasky 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 down payment 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.

Check out these smart stories from Business Insider:

See How One Family Raised 19 Kids Without Going Into Debt

How I Lasted Five Months In South America With Just $2,100 in the Bank

21 US Cities Rich People Love to Call Home

Here's What Happens to Your 401(k) When You Lose Your Job

What Is Wealthsplaining?
Best Cheap Bottle of Wine at Walmart
Best Foods Sold at Costco
Affordable Wedding Favors
From Our Partners
Latest Career & Finance
All the Latest From Ryan Reynolds