This is a post from my husband, Jeremiah.

After this was posted, MSNBC.com had covered a series of stories of how people across the country describing their budget with a $50,000 a year income. It was titled “We are the Median.” This is our story of our live living with a Median income. Since our post was published, our budget has changed.

In 2 in a half years my wife and I managed to pay off $33,111.00 of debt on a middle-size net income. We were able to build a family and purchase a bigger house due to our debt reduction plan. Are you looking for the same solution to how you can pay off your debt and invest in what you want? Then keep reading my friend. Before we divulge into our 18 ways we paid off our debt and purchased a 4 bedroom, 2 bath 3 car garage with two kids to boot, you have to memorize three very important steps.

1. Make sacrifices
2. Learn how to manage your money
3. Don’t spend it on something you don’t need

Get rich, with your Current Income

The reason we don’t have the money we would like to have is because we do not make the right choices when it comes to spending our money. All we want to do is spend, spend, spend. I know this for a fact. I was once in that situation myself. I had got myself into a lot of debt. How you ask? I went out and spent the money I did not have on things I did not need. The following lists my debt and how I obtained it, how I managed my money, and how I paid it off and turned that debt into an additional income.

How I got into debt

1. Purchased a vehicle with a loan.

I went out and purchased a brand new truck that I had been dreaming about for a very long time. $24,900 later I had a brand new 2007 Nissan Titan with only 37 miles on it. Nice! Right? My payments were $475.00 a month, gas to get from A to B was $425.00 a month and insurance costs $110.00 a month. That is $1,010.00 a month for a nice looking truck. Once I purchased my truck, I couldn’t stop buying all the little bells and whistles that I wanted to have for my truck.

2. Credit Card Debt

The bells and whistles cost more money, and to buy those bells and whistles I ended up with a credit card debt of $5,211.00 (but at least my truck looked good).

3. Purchased a Diamond Ring

Shortly after my new ride, I met this beautiful woman who is now my wife. Following tradition, I had to buy her a ring which brought me into even further debt. A wonderful $3,000 ring that has numerous diamonds in all kinds of shapes twisting around the sides. It is B-E-A-U-T-F-U-L. Why so expensive of a ring? I have no idea what I was thinking. I think she still would have said yes it were a $500.00 ring. We did not trade this in, but with changing things in our budget we were able to pay off the ring within a year.

One advise I can give is to try not to accrue debt before you get married. The total of my debt is now $33,111.00 (truck, credit card, diamond ring).

How We Reduced Our Bills and Got Out of Debt

After a while of living paycheck to paycheck we got tired of not having money to do anything. We decided to make some changes to our lives on how and what we spend our money on. For starters, we traded in my truck.

Step 1. I switched out my Nissan Titan for a Nissan Altima where my payments were $337.00 a month, $100.00 a month for gas, and insurance was $78.00 a month. With getting rid of my truck, we saved $5,940.00 a year.

Step 2. I added my wife on my cell phone plan so we could have a lower payment. Mine was $59.00 a month and hers was $73.00 a month. Our cell phone bill is now $82.00 a month, a saving of $600.00 a year.

Step 3. Groceries is always a hard place to cut back on. When you go grocery shopping, make sure you go with a full stomach and you should always take a list with you. You need to stick to that list no matter what. Don’t buy any junk food and only buy the meals you need.  My wife and I use to spend about $120-$150 a week on groceries. When we came home, we had about two meals for the week.

My wife and I have a magnetic calendar that we keep on the refrigerator. We meal plan for every day of the week. We spend an average of $75-$100 a week. You can also coupon, but it takes a lot of time to organize, prepare, and shop to make your dollar stretch. We do not use coupons. That’s right, we buy most of our groceries by store-brand not name-brand. We save anywhere from $0.50 to $2.00 on one item by using the generic store-brand.

Before our girls came along, my wife did coupon. I remember a time we went grocery shopping and saved $60.00 on a $110.00 bill. Were all our items worth a full week of groceries? No, but we stocked up our pantry. With meal planing, it’s a saving of $600.00 a year.

Step 4. Purchases from the internet. Ordering off the internet is another way to save money. You can find items that you would usually by at a store on the internet and it would be a lot cheaper. For instance, one item we buy off the we buy off the web is ink cartridges. We buy them for $2.50 each, but if you were to buy them from Staples it would be $63.00 for all four inks. My wife buys them from 123inkcatridges.ca and she uses internet coupons. Our latest package of ink cartridges only cost us a max of $12.00. That is a savings of $41.00!

Step 5. DIY. The web is also a good way to help you learn how to do certain things like working on your house or even fixing your car. Learning how to do things yourself can save you a lot of money. When you have a professional do it for you, you are paying for labor and sometimes the materials are marked an extra 15% from the store purchase price.

You can also save money on your utilities. A few ways you can do that is make sure your doors and windows on your home have good weather-stripping and make sure they aren’t torn or missing. You can wear extra clothes during the winter so you can turn down your temperature. On summer/spring/fall days where is not scorching hot you can have your windows open with your fan on. You should also change your furnace filters every 2-3 months depending on the kind you have so that you can have a good air flow. If your filters are clogged then your H&C unit has to work twice as hard to get the air cooled down or heated up. The more you change your furnace filters, the more money you save.

Make Money from Your Credit Card

Before you jump the bandwagon and stop reading this, credit cards can SAVE you money, believe it or not. They’re actually money makers for my wife and I. On an average year, we make $500.00 from our credit card. Our credit card company pays usto use them. You’re probably thinking to yourself “What is he talking about? You can’t make money from your credit cards.” If my wife and I do this, then you can too.  All you have to do is get a credit card that has a cash back feature on it. The more you use your card the more cash you will get back. Now I’m not talking about going out and start buying stuff you don’t need. Only buy things you need and also use. For example, my wife and I use our credit card for gas, groceries, cell phone, utilities, dish, cable internet, insurance, cell phone, doctor bills, etc. We use it for everything that will accept a credit card. Here’s the kicker: The only way you make money from your credit card is you have to pay it off in full every month. My wife is the CFO and she makes sure that we stick to our budget and not spend more on our credit card then what’s in the bank.

After I got my $5,211.00 credit card paid off, I switched to my wife’s card who had a cash back feature.

In the end, due to how we changed our budget, reduced things that we did not need (such as extra channels on the TV or a truck), we were able to pay off our debt in two and a half years on a medium-sized income. Our debt was reduced rapidly from $33,111.00 to $0.00. (Autumn chiming in. The biggest tip we can give is that we tithed during all of this. Give God his glory due of 10% of what you bring home, no matter what. He blessed us in return and with his help, we managed to pay off our debt $33,111.00 just in time before baby number 1 came into our lives. We now have two beautiful baby girls and if we did not change our spending habits we would be living in a cardboard box).

October 29, 1929 was the Black Tuesday. The day the stock market took a plunge into a recession. What was it that started the plunge? According to wiki, it was the start of major bank failures and monetary factors by the US Federal Reserve.

What does this mean? Let me put it in english, the Great Recession was a normal recession, like the one we had in 2008 but the recession in 1929 turned out into a Great Depression until we entered WWII. It was only called a Great Depression because everyone was depressed due to the loss of money and inflation. No jobs = no income = no food. No housing. It certainly didn’t help when the farm land dried up and caused gigantic dust storms and major crops failed. Hence, a demand in supply, higher prices. That is inflation. Low demand in supply, lower prices.

Lets fast forward to 2008. Did you know that our “Great Recession” was over in 2009?

Wait, what? Did I just say 2009? It’s 2011! What’s going on? Why are jobs so scarce? Why do we have inflation? Why is our employer halting raises? Why are the interest rates so low to buy a home? Why is the cost of utilities, food, gasoline still rising?

I can answer that for you. We’re reliving the Great Depression, but on a smaller scale. Remember what I said above, it took about a decade for America to recover from the Great Depression. Economist predict that America is not going to recover until the year 2021. Another decade. You can find more information here about a lost decade.

You might ask, “Well, this is good news, so it’s not going to get worse, right?” Wrong.

All eyes are currently on Greece and what Europe is going to do bail them out. Economist predict that if Greece defaults on their loan, then it will send the Europe stock market come crashing down into a second recession. And we all know the recessions are contagious in the global economy. A second back to back recession can cause a deeper recovery. More job loss, higher inflation. More foreclosures.

The moral of this story is, you need to be aware of your current economy. Think before you buy a new house with a higher mortgage, or a new car that will give you higher payments than your current one. Now is the time to refinance for lower payments. Try to pay off your debt. You never know if our economy is going to come sliding down again due to Europe being on the brink of another recession.

If you want to invest, I say invest in what the economy wants now. Invest in what there is a demand for. Just don’t invest in any long-term investments with a higher debt. There’s a huge probability that you may lose it all.

The biggest tip. If you do buy a house, make sure your payments are 1/4th of the lowest income in your household. You want to make sure you can afford it, no matter which way the economy goes. Hopefully there will be two incomes in your house. I strong advise for a single person not to buy, unless you have a back-up plan to still make the mortgage payment in this unstable economy.

As from a christian perspective, it’s interesting to see how God has his hands in this, and how he’s in control and guiding all this. By the grace of God, we didn’t lose our home, but my husband was without work for 3 months in 2009. We’re doing everything in our power to try to quickly get our house paid off.

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