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

By Mandi Woodruff | Business Insider

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.

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http://finance.yahoo.com/news/how-a-family-of-four-manages-to-live-well-on-just--14-000-per-year-174803218.html

Earth to Fiscal-Cliff Pundits: $250K Does Make You Rich

Elspeth Reeve

As the fiscal cliff negotiations reach their final hour, a strange new trend has emerged: people are going on TV and saying, with a straight face, that making $250,000 a year doesn't make you rich. Until the last couple weeks, President Obama and Democrats were insisting that the government should allow the Bush tax cuts expire on those individuals with income over $250,000 a year. Now that marker is reportedly between $450,000 and $550,000. There is lots of debate over whether this is good policy for shrinking the budget deficit. But there should be no debate over whether $250,000 makes you rich — even in playgrounds for rich people like New York City.

Sen. Chuck Schumer said last year, "In the eyes of many, it is hard to ask households making $250,000 or $300,000 a year — in large parts of the country, that kind of income does not get you a big home or lots of vacations or anything else that is associated with wealth." The New York Democrat did not amend that comment when asked about it Sunday morning on This Week, but said raising taxes on income over $250,000 was necessary to bring in enough revenue. CNBC's Larry Kudlow tweeted last week, "As Senators work on a deal, hope they realize that $250K is not rich and not a millionaire." On Meet the Press Sunday, Tom Brokaw said the fiscal cliff debate required a new definition of middle class:

I think this deal will probably get done around the middle class tax cut. It’s at what level. Is it $400,000 or $250,000 or some other number, which is going to be critically important? A lot of people don’t realize in the large urban and suburban areas of America, $250,000 doesn’t make you rich. You’ve got two kids in college at $60,000. If you’re a boomer, you may have a dependent parent of some kind you’re spending another $20-25,000 on. So we have to have the definition of what is the middle class.

Man, I can't imagine living in the kind of large urban area of Tom Brokaw's dreams. Sike, I live in New York City, just like Tom Brokaw. After careful observation, having been both a $10-an-hour intern and a salaried yuppie, I must regretfully inform Mr. Brokaw that even in New York, $250,000 a year is still rich. But don't take my word for it — actual numbers about Brokaw's neighbors prove this. The median household income in New York City is just over $50,000. If you earn four times the median household income, you still wouldn't hit $250,000 a year.

But, like, that's all skewed by really poor people and students, right? Something around $250,000 is what a large plurality of New Yorkers make, right? No. According to a report by the New York City comptroller in May 2012, less than 4 percent of New Yorkers make more than $200,000 a year. There is more income inequality in New York, but it's not nearly as warped as Brokaw and Schumer imply. Here's a chart from the comptroller's report, with emphasis added:



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http://www.theatlanticwire.com/politics/2012/12/fiscal-cliff-pundits-250k-makes-you-rich/60453/