The minimum wage could be as little as $7.25 an hour, depending on where you live in the United States. Although some have pushed to raise the minimum wage, and succeeded in some areas of the country, it is still a challenge that requires lifestyle and living adjustments to be able to afford everyday expenses.
Minimum Wage Budget Figures
Below are some estimates of what your monthly income and expenses could look like while living off a minimum wage job. These estimates include:
- $7.25 an hour federal minimum wage
- 40 hours a week is equal to $290 before taxes
- $290 a week is equal to $15,080 a year before taxes
- Income after taxes is $13,572 a year
- Available monthly funds is $1,131
- Based on national averages, rent can be around $700 a month or more each for two people sharing a two-bedroom apartment
- Electricity monthly expense can be around $73 a month, according to NPR and depending on your state
- Water can be around $20 a month or more depending on your state
- Health Insurance can be around $44 a month/$539 a year or more depending on your state; you can use the Affordable Healthcare Act Calculator to determine yours
Using these estimates, you can see that you are up to over $900 a month for rent, utilities and health insurance alone, leaving around $225 a month for the rest of your essentials.
You can help to stretch your income by applying some sound budgeting tips.
Cut Down your Housing Costs
If you are paying more rent than you can really afford at the moment, you might want to consider downsizing to a less expensive place or part of town. Conduct research and find apartments that are more affordable. Saving a couple hundred dollars each month can make a meaningful impact on your budget, allowing you to use your money for other expenses or necessities.
Do you have debts you are repaying at the moment? Give your debtors a call and explain your situation to them. They may be able to reduce and consolidate your debt into one lower monthly payment. Check into different forms of child care. For instance, you can ask family or friends to watch them while you are at work instead of putting them into a daycare.
Reduce your Possessions
Do you really need an expensive ice-making refrigerator or new car? These things can really take a huge chunk out of your budget. In addition, the more unnecessary appliances you have like a dishwasher, microwave or even a dryer (hang your clothes) will eat up your electricity bill.
Taking Advantage of Available Programs
Use Food Stamps
Look to see if you're eligible for the Supplemental Nutrition Assistance Program (SNAP) to get food stamps. This is a US government run program that gives you money (stamps or electronic debit card) to purchase food. You can save yourself hundreds of dollars each month in food alone. Eligibility is based on the benefits your state provides and the income you make.
Apply for Medicaid Coverage
Your budget can be significantly burdened by healthcare costs and if you live in the US and are a minimum wage job worker with a low income, you might be eligible for Medicaid. It can lower your healthcare cost and even cover it completely in many cases.
Lifting yourself up
Create a Budget for Yourself and Stick to it
Determine what your basic monthly expenses are and don't spend more than what you don't have. Basic expenses include:
- Rent and Utilities
- Miscellaneous Expenses
Most importantly, you should continuously be looking for opportunities to advance through promotions with your present employer, or by finding a new one. Going the extra mile on assigned tasks or roles can get you noticed and give you an advantage when higher paying opportunities arise. You should also look to spend whatever spare time you have on enhancing your skills via local education or training that can help you take that next step up the career ladder.
Living on a minimum wage budget is a challenge for almost everyone. Forget the credit cards and save whatever money you have left after your bills are paid. Make the commitment to succeed. You can get by on a minimum wage job if you make a plan for yourself and take steps in the right direction to grow from there.