No wiggle room: Making life work on minimum wage
Posted
Jan 17 2008, 09:31 PM
by
Karen Datko
Rating:
The minimum wage is $7.15 an hour where Moneychallenge lives. As an exercise, this blogger at The Great Money Challenge tried to figure out how to live on that kind of income. MC is counting on $900 in monthly take-home pay, and guess what: Monthly expenses in this imaginary budget consume every last cent, including $325 for rent (utilities and wireless Internet included), $115 for high-deductible health insurance, some debt payment and retirement savings, and not a single cent left over for emergencies or fun. MC figures a second job would be required.
MC looked around to see what other personal-finance bloggers have to say about minimum-wage living. Our partner blogger Trent Hamm at The Simple Dollar recommends moving to a small town where expenses are lower and selling the car. Don't be too proud to visit the soup kitchen, and seize every opportunity to earn extra money. Get an education to get a better job. He writes, "If you're working a minimum-wage job, either you're very young, very lazy, or very unlucky."
Exjackly's imaginary worker earns only $5.85 an hour (the federal minimum wage) and has weekly take-home pay of $209. His monthly budget has $50 a month for entertainment, but nothing for health insurance. (There is a monthly $50 for "insurance," but Jack mentions using the coverage to replace possessions, not bones.) The worker also has no car, and walks or rides a bike. The monthly food budget is $175. Jack says, "Ramen, macaroni and cheese, and other high-carbohydrate and calorie-dense products will make up the bulk of this food budget."
Jacob at Early Retirement Extreme also would have his imaginary worker get rid of the car, but pay for health insurance, which Jacob estimates at $500 to $1,000 a year. He also says food can cost only $50 a month if you buy in bulk.
For good advice about getting beyond minimum-wage jobs, see our partner blogger J.D. Roth's post at Get Rich Slowly.
