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See how frugal family of four lives comfortably on $14K a year

March 8, 2013 at 10:12 AM ET

For Jason and Danielle Wagasky, $14,000 is enough for their family of four to live comfortably and debt-free all year.

According to 2012 federal guidelines, a family of four living on $14,000 a year puts them $9,000 below the poverty line. The median household income in the U.S. was $50,054 in 2011, according to the U.S. Census Bureau, but the Wagasky family’s frugal approach has them living a life that is “blissful and domestic,’’ according to the title of Danielle’s blog.

For four years, the couple and their kids, Keigan and Libby, have managed with careful planning, using a clothes line in lieu of a dryer and making their own laundry soap. Danielle, 28, shares her tips for frugal living on her blog, writing about how she learned to cook and how her husband built their kitchen.

“I’m happier this way,’’ Danielle told TODAY Friday. “I feel like we’re happier. We’re a better family.”

Their frugal living began when Jason, 31, a former Army sergeant, was stationed in Iraq in 2008, leaving Danielle to manage the family budget.

"He was gone, and I was sad,’’ Danielle said. “Then I had two children to take care of, and all of a sudden, I had to pay these bills. We'd have overdrafts on our bank because I'd be like, ‘Oh man, I forgot that bill that was supposed to come out.’ But I had already spent money."

She was inspired by reading the book "America's Cheapest Family Gets You Right on the Money,” by Steve and Annette Economides, who claim they spend $350 a month to maintain a family of seven. Her goal was to save enough money in two years to help them put a down payment on a home.

When Jason returned from his deployment, he decided to return to school. The GI Bill provided him with $14,000 a year in living expenses.

Read story:America's 'cheapest family': 'We are hope and change'

“You have to decide, as a family, this is what we have, so how do we make it work?’’ Jason said.

The couple dipped into their savings to pay off their car bills and then bought a home outright with the money Danielle had saved while Jason was deployed. They paid $30,000 in cash in a foreclosure sale, taking advantage of the struggling market in Las Vegas to buy a three-bedroom house.

By carefully mapping out meals and sticking to the grocery list without any splurges, the couple has been able to make their $14,000-a-year budget work. They pay only in cash and save credit cards for emergencies, and are also firm believers in the do-it-yourself approach.

“We make our own laundry soap, cleaners, and it saves us money,’’ Danielle said.

They use the local public library to check out books for the children, who are home-schooled. The family’s financial situation could soon improve now that Jason is applying for a job in law enforcement, but they say that more money will not change the way they live.

“The American mentality is to have and want more, like, bigger is never enough,’’ Jason said. “So I think that's where we're kind of different."

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