America's "Cheapest Family" Wants To Teach You To Live "Debt-Free"
Meet Steve and Annette Economides. They are raising a family of 7 in Arizona on an annual income of about $44,000.
The Today Show, which featured the Economides family in a segment, seemed astounded that a family could get by wearing nice clothes and living in a large home — without buying on credit.
Breaking down their budget to 19 categories, they paid off their first house in nine years on an average income of $33,000 a year. Their second home, which they estimate to be worth more than $700,000, was purchased for more than $200,000 and is almost paid off.
They plan every meal before going to the grocery store, building their menu around specials and coupons. The monthly bill to feed a family of seven is $350.
They don’t buy on credit. They buy late-model used cars with cash. They also budget cash reserves for auto and home repairs so they never have to dip into reserves.
Now the Economides are turning their frugal habits into another source of income. They have a NYT bestselling book called "America's Cheapest Family," and a website.
Living frugally may sound odd and heroic to some — but plenty of families already do this. In fact, almost anyone can learn to live within their means.
Take this reader for example. She paid off $14,330 in 20 months just using tips from Consumerist.
It's easier than you think!
Meet the family who live on $44K a year — debt-free [Today] (Thanks, Deborah!)
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Comments:
Apparently, they cut a few corners on their web hosting as well...
I would personally like to know how much their first home was worth, and how they paid it off in 9 years on only 33K income.
Yay! This was my tip!
Their stated income is $44,000 a year. I want to know how much they make through other income streams (before their NYT best seller which likely netted them $500,000 or so). Do the kids have jobs? Do they buy their own insurance, make their own car payments, etc? I think it's highly likely there is a lot more to their story than just "We make $44,000 a year and have paid off 2 houses!"
They certainly aren't paying any federal or state income tax because of their small gross and 7 deductions. In fact, they probably make money because of the various credits offered by the federal government (child credit, Earned income credit, etc.). So, it's not like they are surviving entirely on their own money. They are getting a hand from those who do pay taxes.
@dakotad555: The article states that their average income for the past 26 years is 44k, so that would include the book/web.
Also, they really don't say what their current level of income is - from the story "Their average income over the past 26 years is $44,000." An average over 26 years hides the true current income. Also, no word on if they actually fund any type of retirement account, long term savings or college funds.
@Oranges w/ Cheese: Now, I don't know how you will feel about this, but I was going through the same thing--eating out a lot with BF and I was sick of spending the money and the calories. We are in a similar financial position with the BFs.
I am not the greatest of cooks so I suscribed to Every Day by Rachel Ray. She has meals for under like $10.00 and everything is (for the most part) easy to make and tasty. Even the not under $10.00 meals are not bad on price and they are pretty easy to make! The only debt I have is my car but it is nice to save $$$ on this and still be able to eat good! I think the subscription cost me between $10-$20 but it is worth it. BF gets into it too, so it is fun! Just make sure to get some wine!
@Ingram81: They've been married for 26 years, so I'd bet it was no more than $50K. Of course, interest rates were through the roof in the early 80's.
These people kind of disgust me. Their "tips" involve buying meat that is about to expire or past expiration. They're getting all kinds of tax credits and not paying a dime. Apparently, part of being cheap is living off of other people's hard work.
it seems so easy in retrospect, via the rose colored prism by a book for sale. good for them though.
@rbb: Exactly. I'm supporting myself on an income of $1,909 (average for the past 22 years)!!!!!! I'm amazing!!
@dakotad555: No way they made a half mil. My husband is a writer for major pub houses (10+ best selling books). My guess is they probably had an agent negotiate an advance of 20-30 k, max. They will never get a royalty check due to creative bookkeeping (common practice any more). After the manager takes their 20%, mayber $24 k max BEFORE taxes, which will be about 8 k as self-employment income. So my guess is they probably came out with about $15k in the end.
Of course, this is just conjecture, but I have a basis of knowledge on the subject.
Unless you are Stephen King or of similar stature, writers in general don't make that much money any more.
@rbb: Not on self-employemnt income. Unfortunatley I know this from experience. Still have to pay a minimum even with deductions and credits.
@youbastid: I'm a little tired of the oft-repeated claim that low income people "don't pay a dime" in taxes. They may not pay federal income tax, but they still pay social security and medicare, plus state and local taxes.
Also, what's wrong with buying meat that's about to expire if you're going to use it right away? It's not like it turns toxic the day it passes the date on the package.
Marketing shtick.
"Hey look, we're an average American family living on the super cheap, and we're happy to boot. Want to know how you can do it? Buy our book!" (*warning bells*)
@ideagirl: Yeah, self-employed people get hit worse because they have to pay the social security and medicare payroll tax that would normally be paid by their employer. I know someone who makes less than $10,000 per year, but their effective tax rate is still around 15% because of payroll tax.
Interesting to see people coming out of the woodwork trying to be Amy Daczyn (Tightwad Gazette).
I'm paying through the roof and only have one child. Should I have four more, in order to live easy with a bunch of tax credits and handouts?
I'm glad they're all happy, but I'm not buying nearly expired meat for my child. I buy quality, healthy, mostly organic food for him. Since I only have ONE child and not FIVE, I only have one shot to do this the right way and start him out healthy.
@ManicPanic: I wish my girlfriend offered to pay whenever we go out to dinner. And she's the one that insists that we go out!
Average income over the past 26 years is $44,000
$28K starting income in 1983
3.5% annual increase
~$44,500 average income
~$66,000 income in 2008
They're likely making significantly more than $44K annually right now. Also, $28K in 1983 dollars is roughly equivalent to $58K in 2007 dollars, and they were earning that when they had ZERO kids.
So yes, it's pretty impressive raising 5 kids on a modest income, but not quite as sensational as it's made out to be.
@Don Chiurazzi: Sweet Christmas! That is terrible. I'm submitting this to Web Pages That Suck. My favorite part is the nice block of keyword spamming they've set up in the footer of the page. Oh! And look! Another way they've saved is by using a "Free Web Counter!" FREE!!! 9_9
How is your home "almost paid off" if you obtained it "without buying on credit"?
According to census.gov, the median (i.e., 50% of families have less than this amount) family income is $58,000. For a family of 7 or more it's about $61,000. I'm willing to bet there are quite a large number of families that are getting by on $44k or less each year.
Meat doesn't turn into a puddle of rancid anthrax the day of the best before sticker. Beef is often aged (left to hang) so it becomes more tender. Same with game meat. I wouldn't gnaw on a raw aged steak but once seared it's fine.
I went through the book and it was interesting. Much of it useless to me since I don't have near the food storage capacity as they do, but the tips about food storage are helpful. Many fruits and vegetables can be stored for weeks in a properly working fridge, grains and canned goods longer, and frozen foods store very well as long as it's wrapped carefully and the freezer works well.
Planning meals is a lot of week. I plan out our meals a week in advance and while many of the favourites are no brainers, there are seasonal ingredients to consider as well as sales.
People on low incomes or limited budgets work really hard to survive. It takes hard work to earn a pittance (and remember, minimum wage means if your employer could pay you less, they would). They are not "living off of other people's hard work" -- they already have their own hard work. Shopping, working, errands always take more time, thought, and planning than for people who can afford to hope in the car and drive to the most convenient mall.
As far as taxes go the idea behind tax credits is people who are better off economically can pay a greater share of taxes for the greater good. Those with special costs (and yes, children are special because they need more care and are more vulnerable to poverty) pay a less share of taxes. This is what helps prevent a society from going into the toilet (please see the different Third World countries if you have any doubts. They are listed in Wikipedia).
Time to move to Scottsdale Arizona!
But serious. Annual family cost of living in Scottsdale, Arizona: $59,639. Considering their income, totally reasonable.
Oh, wait, 7 kids? So what. Cost of raising kids is not linear, it is logarithmic. The more kids you have, the cheaper per kid it gets. Typically after 3 kids you can easily pass things down between generations, only have to buy new for the oldest (possibly of each gender, but not necessarily), and at a point they start babysitting themselves. The more kids you have, the more hands-off things become and the more you are a manager than a care taker.
The only real cost increase as you have more kids than three? Food. Even that becomes logarithmic after you reach a certain amount.
But, what about entertainment? You can do that cheap and you can apss it on just like clothes.
So, the number of kids statistic is nearly meaningless. And the cost of living is the MEDIAN cost of living for the area, so living on $44k per year is totally doable.
Now, I would like to see them pull off the same trick in New York.
Thats nothing my dad raised our family of 6 on an anual income of no more than 24K for 8 years. We managed to get by just fine without eating expired meat. My mom was just always a smart shopper plus my dad never owned a house we just rented.
They originally started out with 14 kids, but ate seven of them to save on groceries.
IF they were really frugal, wouldn't they be buying things with a cash back credit card? After all, why pay cash for things when you can pay for it with the credit card, pay it off right away (maybe even send in a payment after every transaction), and then watch the 1-3%+ come back to you at the end of the year.
I've been hearing about this family forever, but their average income is *always* seemingly fixed at $44k. I'm a bit skeptical of how their income hasn't fluctuated from year to year.
Then again, maybe the fame of their cheap lifestyle caused the employers not to want to offer them a bonus -- ever. (And they never bothered to get another job?)
It just sounds so fishy. And they get SO much publicity from it.
Another fantastic aptonym! Economides. Heh.
They would be considered rich in my family. My parents managed to raise two kids, and buy a house (and pay it off) making only around 25k. And this is in NYC!
Things were a lot cheaper back then.
They are so cheap they couldn't afford a real web host. Looks like the extra consumerist traffic has the site timing out...
The best advice my Dad ever gave me was "Buy the brown meat". You can take it home and freeze it it is safe and it lasts just as long. I go to the market early, right when they open, and snach up all the butcher specials. So don't diss the way people save.
BTW I support my family of 4 on $40,000 with no credit.
My wife can be home and keep our kids out of the hell that is daycare.
@youbastid: I would have loved to pay no taxes when I only made $15,000 a year. Unfortunately I still paid medicare social security sales tax local tax state tax...I may have gotten my fed tax back in April but that was about it.
@Orv: I know, it sucks, been there. All that cr*p the politicos spout about being small business friendly is just that, cr*p. If it were true they would find a way to fix it. I am not against paying taxes at all, but the IRS has bent me over too many times for me to have much sympathy for big corps who get away with moving profits off-shore then paying little or nothing.
@youbastid: Where did you get that "not paying a dime?" I seriously doubt that. If you are talking about the large family, those are not tax CREDITS, those are tax DEDUCTIONS, which are two different things. And since they just published a book (which is self-employment) they most certainly ARE paying taxes.
@Don Chiurazzi: The website is pretty much shot, but their blog is still up and running.
It's a little light on details and actual useful information, but it's not terrible
@sasper: There is no Federal law requiring you to always pay, or prohibiting you from suggesting to her that she pay sometimes too.
@Don Chiurazzi: I saw the website briefly. It looks like they also cut corners by having the family dog do their web design
@AriellaFaerie: Interestingly, Amy Dacyzyn had a similar marketing gig - she didn't reveal for some time that most of her husbands' and her saving money happened BEFORE they had kids.
@Tamar Weinberg: I suspect that there was one press release saying "$44k" and lazy-ass journalists keep recycling the info.
Ok, that's it. I'm telling my boyfriend that we aren't eating out any more unless its a very very special occasion.
I neeeed to save (he's making so much more money than I am, and I don't think he realizes I'm in dire straights).
I'm not in debt - my car will be paid off in Feb or March - but I have no money to do anything with my life, like purchasing a house or a new car if necessary.