It often happens, in discussing general financial well-being, that someone will say: “But these days, families neeeed two incomes just to get by.” I have always disagreed with that statement, if only because childcare expenses demolish most of the second income. For my example, I habitually point to one of my former Army colleagues, who supported his family of nine on a single income. His wife, who had a Master’s degree, could not afford a job; she provided all childcare, managed their finances, cooked bulk foods at home, and the kids had to make do with hand-me-down clothing and toys. Luxuries were out, and financial discipline was in, but really – they lacked for nothing, in the big picture.
This weekend, I ran across an even more impressive example of people who know how to make it on a small income: Jason and Danielle Wagasky. You can bet that next time someone whines about “neeeeding two incomes just to get by,” I’ll be mentioning the Wagaskys. They own a three-bedroom home and two cars, and are living nearly debt-free… no car payment, no mortgage, no credit-card debt… and supporting their two children on just $14,000 per year.
It wasn’t always so. When Jason was on active duty in Iraq, in 2008, they were far better off financially than they are now; Jason was raking in his active duty pay, hazard pay, allowances, benefits, and tax breaks. Yet, like so many other American families, they weren’t making ends meet and had nothing saved. Danielle was overspending and missing bill payments at home.
What a difference one’s attitude makes! Jason insisted that Danielle read America’s Cheapest Family Gets You Right on the Money. They had a talk about their goals, and Jason’s plans to leave the Army and go to school on the GI Bill… meaning, a serious pay cut was coming. Danielle read the book ran with it. By 2009, they had saved $30,000 for a down payment on a house.
Faced with a pay cut down to $14,000, most couples I know would decide that there was simply no way to survive, and Mom would go out and find a job. The long hours outside the home would mean childcare expenses. Two worn-out parents at the end of the day would mean more expensive convenience foods, whether from the grocer or the restaurant. It’s those kinds of things that add up, and end up negating the value of the second income.
I believe, for two-parent families, that a stay-at-home parent, some forward planning, and firm financial discipline are all that is needed to live debt-free, and the Wagaskys prove it every day. Like my old colleague’s wife (and like my own Mom decades ago), Danielle really runs her household, doing all the cooking, childcare, and budgeting. That budget is the key: once the monthly budget allocation is spent, there is no more until the following month. Period. No borrowing, no credit purchases, no rationalizing about it. Stay strictly within your means. Just like the days before credit cards.
Reader comments on the several news articles about the Wagaskys are split. Some are admiring (“They should be hired as consultants for the government!”), others doubtful (“Living maybe…but living WELL on 14K a year is just pure BS.”), or even critical (“These types of articles are trying to socialize us to accept a lower standard of living.”). One particularly long and disbelieving comment even picks apart a budget for a hypothetical family of four (one which does not resemble the Wagaskys) and makes a lot of crass assumptions about welfare. It is clear to me that the naysayers either did not read carefully, do not understand that Jason is no longer receiving military benefits (other than the GI Bill), or just flat-out don’t want to accept the fact that doing the same thing themselves would require discipline and sacrifice. Are they willing to live like the Wagaskys, and give up cable TV and eating out? Are they willing to sew their own clothes or buy appliances from thrift stores? Bake their own bread and mix their own laundry detergent? Get their books from the library? Are they even willing to sit down and do the math to figure out how much money these actions would save? Mostly, I think not.
Some naysayers have argued that the Wagaskys didn’t buy their house on $14,000 per year. True enough, they did that by planning ahead and saving Jason’s active-duty pay, yet another thing too few of us do. Too many of us, no matter how much we make, tend to spend it all, M.C. Hammer- style, and even take on additional debt, believing we can pay it off. Then we whine about how hard it is to save money.
Well, the Wagaskys started out that way, too, but then they made that hard, conscious decision that most of us just don’t want to make. Seeing a big pay cut looming, they stopped their frivolous spending, and in just one year, managed to go from zero to $30,000 in savings (I do not personally know anyone who has done this). Then they used those savings to buy a house for cash. Smart move! Property taxes are a dang sight cheaper than rent any day.
For anyone who wants to learn more about how Danielle runs her household, here is her explanation on her blog, Blissful and Domestic.
Olivia Ashe, writer
March 5, 2013
Reblogged this on Olivia Ashe, Writer.
Lauriate Roly.
March 5, 2013
Terrific article. I don’t know of anyone who could ever do it the way the Wagasky’s have done it . . . except my mother.
The Color of Lila
March 5, 2013
Lauriate, your mother and my father. He was old enough to remember the 1929 stock-market crash and all that followed and grew up with clothes that didn’t fit and too little to eat, at times. People from our parents’ generation knew what real struggle was.
Chris Glass
March 5, 2013
The Wagasky family has taken this farther than most people will proving that common sense and ingenuity can make a difference. I have to say that they were fortunate to be healthy and not have any ongoing medical conditions.
The Color of Lila
March 5, 2013
Chris, in digging around for more info – they do say that their credit cards are reserved for medical use only, and then it is a priority to pay them off using their savings (they still try to save). Some naysayers accused them of having military medical care, but I can tell you this is not true. Jason, as a recently released non-retiree veteran, MAY be entitled to up to five years of VA health care; his dependents are not entitled to anything from the military. It is possible that Jason has student health insurance through his school, but the family still has medical expenses.
Mimi
March 6, 2013
The only problem that I see, is that she is losing the chance to build up retirement savings, both for her benefit (if something happens to him) and also for their family’s benefit.
The Color of Lila
March 6, 2013
Mimi, yes, she is taking the risk that many traditional / conservative women take: that nothing will happen to her husband (we discussed this on the article “Opposing Suzanne Venker’s View on Women’s Happiness”). This is exactly the right situation for hubby to have life insurance.
It’s interesting: I find Ms. Wagasky appealing and Ms. Venker unappealing yet they are similar in the sense that they are conservative stay-at-home moms. The difference is that Wagasky does this of necessity as well as choice, and puts in a huge amount of effort and work to run the household; she is a real partner. She also merely offers her viewpoint and her advice is on practical matters that anyone might find of interest, whether married or single, parents or not. Venker, in contrast, seems to just want a man to take care of her, making her something less than a partner in my view. She speaks of going to the gym or grabbing coffee with friends while hubby is at work; I don’t picture her really running the home even though she is a mom. And then to top it all off, she rams her personal life choices down her readers’ throats as “what women really want.”
Mimi
March 7, 2013
Lila, I do agree with your very valid point. I also was a stay at home mom and then a part time working grandmother. My choice. But in the end a stupid one. I hope Mrs Wagasky doesn’t regret hers. Running a household IS for anyone who truly does it is a tremendous amount of work. It can also be tremendously satisfying. I look at my kids (both successful in their chosen careers) and my now almost adult grand kids and feel good about the choice I made. I hope that Mrs Wagasky feels the same when she is my age.
The Color of Lila
March 7, 2013
Mimi, I don’t think your choice was stupid! Maybe it bit you in the butt at some point, but that can happen with other choices too…. like kids turning out poorly because they didn’t have enough guidance or attention or discipline growing up, or never had a family meal in their life because the family schedule was so haywire. The fact that you feel good about your choice now means it was the right one. Take the long view.
It was my choice to remain childless, but had I ever gotten pregnant, I would have left the Army and been the “Army wife” to my husband’s career. I know I would have found that immensely frustrating in many ways, but I also know that I would feel horrible shunting my kids’ care off to someone else. Especially for long deployments.
Heart
March 8, 2013
They don’t have health insurance, they don’t have any savings, and they’re one car accident or broken leg from financial ruin. I don’t find that particularly admirable or something I’d want to emulate.