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RENEE MONTAGNE, host:

This is MORNING EDITION, from NPR News. Good morning. I'm Renee Montagne.

STEVE INSKEEP, host:

And I'm Steve Inskeep.

All this week, we've been hearing how Americans live on about $50,000 per year. That is the median household income in this country. Half the country makes more, and half the country lives on less. Many of the people we're meeting are struggling.

MONTAGNE: Not the people we'll meet this morning. The Donnell family of Phoenix, Arizona isn't interested in making more money.

NPR's Ted Robbins explains.

Ms. ISABEL DONNELL: And C is for cowboy, cactus and coyote.

TED ROBBINS: Eight-year-old Isabel Donnell is helping her four-year-old sister navigate a computer spelling program, while their dad, Gregg, is in the kitchen, cleaning up after dinner. During the day, Gregg Donnell builds and repairs computers as a freelance IT consultant. He says the recession affected his business.

Mr. GREGG DONNELL (IT Consultant): The number of computers that I used to sell has definitely gone down, but it's also picked up in more repairs.

ROBBINS: So Gregg's income has stayed steady at roughly $20,000 a year. His wife Lola earns about $30,000 plus benefits, working part time as a medical technician in a nearby hospital lab. A decade ago, the couple earned twice as much, about $100,000 a year. Gregg sold insurance, and they lived in tony North Scottsdale. But he wasn't happy.

Mr. DONNELL: We were on this treadmill of making money, as much money as possible every year, and feeling like we had to always increase that because we wanted to be able to buy more things and live in a nice house and have nice cars and everything else.

ROBBINS: At the same time, Lola Donnell didn't get a job she'd dreamed of: working at the Mayo clinic in Scottsdale. That's a painful memory.

Ms. LOLA DONNELL (Medical Technician): I remember I prayed - I prayed so hard. I still didn't get a job. But there was a sense of letting go.

ROBBINS: They were both ready to make big changes. So in 2000, they moved from Scottsdale to a home in a modest neighborhood in Phoenix. They grew spiritually. Their home is filled with Catholic imagery, a tapestry of the Last Supper, crosses in nearly every room. They decided to work less so they could spend more time with their children. So they cut their expenses, along with their income. While others chose to borrow and spend more than they made before the recession, Gregg says he and Lola chose not just to live within their means, but to live within their needs.

Mr. DONNELL: We realize - I realized that we don't need as much. You know, the things we have are very good. You know, we are very fortunate to have what we have. We may not have the newest or the best, but we have what we need.

ROBBINS: But a simpler lifestyle does not mean simple choices. Their 1999 Subaru Forester is worth about $4,000, and it needs $2,500 work.

Mr. DONNELL: I was at the point of almost signing the papers this weekend to get a new car.

ROBBINS: But that meant new car payments.

Mr. DONNELL: You know, we've kind of talked about it, and I think we're going to go ahead and fix the car, maybe do pieces of it at a time rather than paying all $2,000 or $2,500 all at once.

ROBBINS: Gregg Donnell also makes money go farther by bartering his computer expertise in exchange for landscaping services and home repair. They have a 16-year-old son, Tyler, who's getting good enough grades for a scholarship to Arizona State University next year. And they use credit cards for everything. That's right.

Mr. DONNELL: We use our credit cards to rack up miles - like the girls and my wife are all traveling to Florida for free on Southwest because of our credit card.

ROBBINS: They pay off their cards every month. And they recently took a trip as a couple. They drove to Sedona with their tent, but they ended up getting a free room in a luxury resort by sitting through a time-share presentation.

Ms. DONNELL: Needless to say, it was, like, one of the best times I've ever had.

ROBBINS: So, the Donnells don't feel they've really given up much. They can cover their $600-a-month mortgage, while the home across the street is a short sale and several others on the block are in foreclosure. Gregg says his investments took a big hit in the recession, but they've come back some, and he's even managed to save enough to live for a year if they both lose their jobs. Lola says she's had time to meditate and reflect.

Ms. DONNELL: I'm learning that it's a benevolent universe. We're taken care of.

ROBBINS: The Donnells could work more, but then they'd have less time for what matters to them. They choose to live in the middle. It helps them feel comfortable financially, emotionally and spiritually.

Ted Robbins, NPR News.

INSKEEP: You can hear all the stories in our Living In The Middle series at npr.org, where you can also tell us what you think it means to be middle class.

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