How a Family of 4 Stays Debt-Free on an Income of Less Than $50,000 Per Year

A second marriage for both of us, we started over from scratch later in life and we've managed to raise two children debt-free. We haven't given up anything. We own our own house, three cars and even go on vacation every year. Here is how we live.

We paid off our mortgage early by paying our loan before we spent on anything not needed. We use our credit cards only for things that we can pay off when we get the bill and we always ask ourselves if we really need whatever it is that we are considering buying.

(savings = $300-$1,500 per year) Household: We never use our clothes dryer. One load of laundry fits on two wooden drying racks and drys overnight in front of our wood stove saving a few hundred dollars or more per year. It saves on the clothing too; less wear and tear. Most of our clothing is bought at thrift stores. It's amazing how many brand name items can be bought at a fraction of their original cost. Sales at the retail store usually just lure customers into spending money for clothes they don't really need. I splurge on the teenagers at Christmas when they can get some new clothes cheaply during the after-holiday sales.

(savings = $3,000+ per year) Heating: Our heating bill is FREE, yup, free. We heat exclusively with wood although we have an oil furnace as back up. The wood costs us nothing as my husband offers to cut unwanted trees for our neighbors in exchange for the wood. Yes, it's a bit of work, but definitely our biggest budget saver. Our state also offers roadside trees already cut down by maintenance crews although we have never taken advantage of this. You just have to ask.

(savings = $2,000+ per year) Food: We only eat out a few times per year. We brown bag it to work, school and even when we travel. I try to make a large batch of soup or something that will make a few meals with some leftovers for lunches. We eat together nearly every night and I set the table as if we are at a fancy restaurant. Why save the special dishes for company? My family IS special. Cut out the daily $3 cup of coffee and $15 eating out per week and save nearly $1,000 per person right there.

(savings = $600+) Entertainment: We have a high speed internet connection so we do not need television. It costs $50 for the Internet and $10 for an online movie subscription. We wait for movies to come out on DVD. If you go to the movies once a month at $12 per person (ticket & snack), you would spend about $576 for a family of four. Hubby plays the guitar, daughter enjoys photography and my teenage son is a video game junkie like most of his friends. The kids ski passes costs $60 each for the season because they are honor students. Hubby's is $25 as a senior and mine is $600. It's our winter family activity. During summer vacation, we travel around the US and Canada with a pop-up trailer and a some kayaks both purchased second-hand. We did travel to Brazil and stayed with some new-found friends which is a story for another day.

(savings = $40,000+)College: My son has already qualified for a full scholarship to a state university next year and if he gets into the ivy league school he is shooting for it will be totally free. Both teenagers know that we can't contribute much to their secondary education as together we earn roughly $50,000 per year so they put their schoolwork before other things to get that college scholarship. I earned my undergraduate and graduate degrees by having my employer pay for courses while I worked full-time and my husband qualified for his graduate degree with a government grant.

We do well living within our means and live a great life. We won't be stressing out over debt by never getting into it in the first place and neither will our kids.