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REDDITSurviving on minimum wage is challenging anywhere in America — especially so if your area has a high cost of living. Full-time workers making $7.25 an hour, the national minimum wage, bring home $15,080 per year before taxes. As The Balance points out, that will leave you a housing budget of just $377 if you try to follow the recommendation that 30 percent of your income — or less — should go toward rent.
Making ends meet on minimum wage is difficult no matter where you live. Here are some tips to help you make the most of your income.
Allocate Every Dollar You Make
Do you ever feel like your paychecks disappear each month yet you’re still coming up short? Get organized with a budget; this will help you anticipate and prioritize your most important expenses first.
The goal here is to allocate every single dollar you bring in. You Need a Budget calls this “giving every dollar a job.” Say you make $1,150 per month after taxes. Your budget should account for this full amount, which means you’ll need to sit down and decide how you’re going to assign those dollars to various categories.
Start with the essentials: housing, utilities, transportation, and groceries. Then allot money to financial obligations like credit card bills, loan repayment, and building an emergency fund. The last step will be setting aside a small amount of money for wants, like clothing or travel.
By the end of your budget, you’ll have reached $0 in available funds. Every dollar will be going toward a strategic purpose based upon order of importance to your life.
Track Your Spending in a Budgeting App
Creating a budget is one thing; living by it is another. Perhaps the easiest way to track your spending across categories is through a budgeting app. This way you’ll have quick insight into your financial situation wherever you go. Many apps allow you to set notifications for overspending, too.
Make More Than the Minimum Payments on Debt
It’s totally understandable if you’ve accumulated some debt while surviving on minimum wage. The key is to get out of this debt cycle as soon as possible. How? By making more than minimum payments on your balances whenever you can to minimize how much you’ll rack up in interest. If you pay only the minimum amount due, it can take years longer and hundreds or thousands of dollars more to pay off your balance.
If making monthly payments on your debt feels like trying to stop your basement from flooding using a teaspoon, it’s worth exploring more structured debt relief options. As many debt settlement program enrollees have written in their Freedom Debt Relief reviews, struggling to keep up with monthly payments on credit cards was what made them look into debt settlement in the first place.
There are options available besides watching your debt grow each month. But chipping away at what you owe will require either paying more than the minimum or pursuing a debt relief strategy.
Find Out if You’re Eligible for Government Assistance
You may be able to qualify for government assistance, depending on where you stand in relation to poverty guidelines issued by the U.S. Department of Health & Human Services.
The poverty guideline for a single-person household is $12,490. For two people, it’s $16,910. If you fall below these thresholds, you may qualify for federal programs — like health insurance through Medicaid or nutritional assistance through the Supplemental Nutrition Assistance Program (SNAP).
There’s no easy way to survive on minimum wage, but you can give yourself the best financial foundation possible by budgeting effectively, tracking your spending, addressing your debts head-on and utilizing government assistance if you’re eligible.
