How to Live on Minimum Wage
Many have the experience of living paycheck to paycheck, and no one knows this feeling better than people living on minimum wage. Even if it feels like you're pinching every penny, there are still probably areas where you can cut your spending or add to your earnings. Following an honest and reasonable budget should be your primary goal, and this article will help you develop a monthly earning, spending and savings plan.
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Instructions
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Creating a Budget
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1
Gather your pay stubs and determine your bi-weekly take-home wage (this assumes you're paid every two weeks). This is the amount of money in your check after applicable taxes and any garnishments (child support or other). If you work a full-time job at present minimum wage ($6.55), you will make $524 per check before taxes. This will increase to $580 per check ($7.25/hr) on July 24, 2009.
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2
Make an accounting of money spent on a bi-weekly basis. Expenditures might includes groceries, gas, the cost of any hobbies, any habits (such as smoking) and any other money you spend on a regular basis. Be honest with yourself: You are trying to come up with an accounting of how much money you spend, not how much you should be spending.
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3
Gather your bills and come up with a monthly total of outgoing money. Divide this amount by two to determine how much of each check must be set aside to pay your bills.
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4
Add the totals from Steps 2 and 3. If this new total is greater than the total from Step 1, go to Step 1 of Section 2. If it is less than the total from Step 1, go to Step 1 of Section 3.
Reworking a Budget
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Find corners to cut. If you have any memberships or subscriptions you could give up, do so. Can you consolidate two phones down to a cell phone? Do you spend too much money on junk food at the grocery store? Can you give up smoking? (Depending on where you live, giving up smoking can put an extra $150-$240 in your monthly budget.) Can you consolidate your loan payments? Can you take the bus instead of driving?
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Move forward with your plans. Depending on where you decide to shave money off your budget, this may include calling to make the necessary cancellations, contacting a bank to consolidate payments, revising your grocery list, giving up cigarettes, finding a bus route, and others.
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Once you have reduced your expenses, repeat the steps in the first section. Continue cutting non-essential costs until the total from Step 1 is greater than the total of Steps 2 and 3.
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8
Consider getting another job. If time permits and you cannot decrease your spending to less than or equal to your monthly income, this may be your only option.
Money-saving Tips
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9
Consider your shopping habits. Money can disappear at the grocery store without quite understanding how. In particular, junk food, which is less difficult to prepare than other food, especially if you do not have a stove or microwave, is often much more expensive than cooking your own meals. Fast food, a great option for a busy person, can also cut deep into a monthly budget--eating one meal a day at a fast food restaurant can cost more than a smoking habit. You can save large amounts of money by shopping around, visiting different stores to get the lowest price on the products that are staples of your diet and also by changing your eating habits to include making your own meals.
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10
If you still have difficulty feeding yourself and your family, consider applying for food stamp aid through the Social Security Administration (visit any Social Security office).
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11
Go to the library. Libraries offer many services for free that you might be paying for: You can use the Internet, read papers and magazines, and check out books, movies, and music, cutting out at least one bill and providing multiple forms of entertainment.
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12
Budget for emergencies. You never know when you or a child might get sick or something goes wrong with your car or home.
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13
If you have any extra income at the end of the month, place it in a savings account. A savings account grows with no effort on your part and will grow faster the more you can put in it.
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Tips & Warnings
Once you have made a budget, stick to it.
You should always be honest with yourself when creating your budget.
Take advantage of everything your community has to offer: second-hand stores, free clinics, soup kitchens, and any other services for struggling people. Don't be embarrassed: almost everyone experiences financial hardship at some point.
Odd jobs are always an option for bringing in more income. These are typically jobs that involve only a small time commitment and you can negotiate what you feel is a fair wage.
Try to pick up extra shifts–overtime is a minimum-wage earner's best friend.
Never compromise on necessary expenses: There's no reason to go without food or child care (if you need it). Always cut non-essential costs before all else.
