Family of four lives debt-free on $40K a year

(CBS News) 

Danny Kofke and his wife, Tracy Kofke, have made the seemingly impossible possible.

The Jackson County, Ga., couple are both school teachers, but even before they married and had kids, they decided Tracy would stay at home. The Kofkes also decided the family would never carry any debt aside from their mortgage

On Danny Kofke's salary of about $40,000, the family of four has managed to stay out of debt, build some savings and keep Tracy at home raising the kids for seven years. And they're still doing it.

How?

One of their suggestions is for couples to set their financial goals together.

Danny Kofke said, "Long-term planning was huge in our (arrangement). Obviously, if one of us is a spender and one is a saver, it's going to be very difficult, and we discussed this before we had children, while Tracy was still a school teacher and we were making two incomes at that time and relatively larger than what we are doing now, but, obviously, to live off 40 grand a year, we couldn't have a lot of debt and huge mortgage payments and car payments. So while she was working, we worked toward the future to prepare ourselves to live on my teacher's salary alone."

For more tips on how they do it - and thrive - check on the video above.

For more information on living for less, check out Danny Kofke's book, "A Simple Book of Financial Wisdom: Teach Yourself (and Your Kids) How to Live Wealthy with Little Money."

[thejoker12]

I live off 38 grand a year with a family of 4. big deal. Try budgeting with a figure $25. dollars more then the public aid cut off figure. I have been there and it is next to impossible. I am sure many people out there would love to budget 40 thousand and do a better job of it.

[AAnnie52]

LOL - my dad supported 11 people on less than that for almost 40 years. Granted, things were cheaper but salaries were less too. I do agree you need to plan, have emergency savings for the inevitable rainy day, and work together. If it's all you've ever known there is little sense of deprivation so that's not an issue. Flexibility and discipline are key. As kids if we wanted the souped up version of a basic item (e.g. jeans or sneakers) our parents funded the cost of the basic item and we earned money - as in babysitting, yard work, delivering newspapers - to make up the difference ourselves. As long as they have medical coverage, house insurance and retirement planning covered they will be fine. I'm sure they are working on paying off the mortgage next.

[Martha12345]

Why is this so news worthy? Most people do something very close to this all of the time.

[LLC8808]

This wouldn't be feasible in DC or NY, not being critical. I would be more in awe if it was in the south

[ToolMangler1]

I have done it for the past 63 years and I lived in the south most of my life. I own two homes, Two Cars a Motorcycle and vacation for a month at Myrtle Beach SC every september, (Average rent, $500 a month). It can be done, without starving, but you can't eat at the 'Outback' every week..

[ToolMangler1]

BTW: I do all my own repairs to "Everything".. (Its cheaper by 70%)

[moshe05]

how do they afford their cell phone/cable/netflix/high speed internet/three giant SUVs/60 inch televisions/directv etc, etc, etc???????

[Hala_c]

So they have sustained that for seven years, good for them. Can they sustain it for the rest of their lives with the ever inreasing costs of living? I seriously doubt it!

Don't hold these folks up as an example of how the rest of the working class should live.

[ToolMangler1]

If you can't hang with the Big Dogs, Stay on the porch...