Frugal Living 

Try Living On Minimum Wage

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Stacks of CoinsWant to learn how to be frugal without having to resort to the extremes of spending only a dollar a day on meals? Try living on minimum wage. I’m not recommending that you pull a Morgan Spurlock but you should try to put yourself into the shoes of millions of Americans working a minimum wage job and try to figure out how they’re surviving. They do it every single day and they, through trial by fire, have learned what it takes to truly be frugal. You have to walk a mile in a man’s (or woman’s) shoes to truly understand.

Minimum Wage

So, how much is minimum wage and how much can you spend? The Federal Minimum Wage is currently $6.55 an hour, set to increase to $7.25 an hour on July 24th, 2009 (it may be higher in your state). If you assume an 8 hour day, that’s a grand total of $52.40 in earnings that day.

Taxes: If you worked 2,000 hour (the standard number of hours budgeted by companies) year, $6.55 is only $13,100 a year. Once you deduct the standard deduction of $5,450, we’re talking $7,650 of taxable income assuming no other deductions. According to the 2008 IRS tax brackets, you would be taxed at 10% for a total tax of $765.

Your $13,100 a year is effectively $12,335 after taxes. That’s a little under $1028 a month.

Rent: It’s difficult to assume what your rent is because it varies across the country but let’s take a nice round number of $500. Deduct $500 from $1028 and you’re left with $528. Divide that by 30 to figure out how much you can spend each day.

How Much Can You Spend?

The answer is $17.60. (if you assumed rent of $300, that would still leave you with only $24.27 a day to spend)

That’s right, if you work eight hours of minimum wage and have a $500 a month rent payment, you can only spend $17.60 before you start going into debt ($25 if you pay only $300 a month in rent). This is why so many people working minimum wage work two or three jobs, because eight hours is simply not enough. (There may be other social programs to help, like food stamps, but I didn’t want to get overly complicated in this discussion)

Eye opening huh? Try living on less than $18 a day for an entire month, I mean really try, and you’ll discover some things you didn’t think were possible.

(Photo: ppdigital)

{ 127 comments, please add your thoughts now! }

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127 Responses to “Try Living On Minimum Wage”

  1. Anonymous says:

    I don’t care who has died in War’s… defending this country in the past!! Sorry Soo called country!!The middle class is not alive and kicking anymore!! Special interests are killing us all!! Who in Gods given name can live on US Min wage!!?? the Rich get richer and the poor are getting ALOT poorer!! *To all the patriots in this country!!move to canada!! You have nothing to defend anymore!!**And too all you republicans …go to hell!! Its time for a CLASS REVOLUTION IN THIS Country!! Much as the French did!! Heads will one day roll!!

  2. Average Joe says:

    I have been living at less than minimum wage (my job will not give me more than 30 hours a week, and I cannot find another one to supplement it) for the past 6 months. To all the people who say “no problem,” go ahead and try. And not just for a week or two–try a few months. And realize that you have the option to get out of it at any time. Some people are not that lucky. By the way, I am college educated and not disabled in any way. I spend any hours not working looking for work (updating resumes, calling and emailing companies, showing up on doorsteps, etc). It is not as simple as some make it seem.

    • netta says:

      You’re right, Joe. It’s not easy, it’s damned hard work. I hope your persistence pays off and something pops for you soon.

      You can do everything right and still end up in a world of hurt — and there’s more people experiencing that every day. I think most people would just like to wake up in the morning without a knot in their stomach about how they’re going to eat or get by for one more day, and without the worry of how they are going to provide for their family. One job isn’t enough — two isn’t even enough. It’s scary.

      Good luck.

  3. Justme says:

    I have a question for every one. Okay, so I am 18, started college at 17. When I first started I knew I wanted to go for marketing, a year later (today) I became pretty lost as far as college is concerned. I started to realise that I would be in debt thousands of dollars after college, and I would probably never pay it off….my credit score wont be great either.

    Now I started my own company, I like the money and its my 1st year in business. I can grow my business in as much time as it takes to get an undergraduate or graduate degree…and I can make as much if not more $$ as my peers who would then be in debt thousands of dollars from college.

    I want to focus exclusively on my company, and I want to forget about college (and the debt it will put me in). The only thing holding me back is the criticism I will get from family and others for being a “college dropout.”

    Now my question to you guys is: If you were 18 again, and in my situation, what would YOU do???

    • netta says:

      Justme, first of all congratulations on starting your own business. That’s a difficult thing to do, and if you’re making money already that’s even more impressive.

      This is just my opinion — and to me, opinions are like a$$es…everyone has one, and they all spew the same material. Take what you can use from it and chuck the rest. No hard feelings.

      Personally, if I were 18 and had the option to go to college and knowing what I know now, I would pass (with qualifications that will appear below). The load of debt is just too much. Unless I chose to be a plastic surgeon, there’s no guarantee in any industry you will be able to pay that money back. I just can’t see starting life out at 18 with that big a millstone around your neck.

      That being said, I would still (and I have, because I did not have the option of college at 18) pursue any avenue of education I could. Whether that means taking a class here and there as I could afford, taking advantage of free lectures or seminars, or reading relevant material until my eyes bled, I would be all over it.

      There’s an old saying I once heard that has really stuck with me over the years. “If you listen to dogs barking, you will go deaf without learning much.” Meaning, people will say what they feel they have to say. So what. They don’t live your life, pay your bills, or have your experiences. The best revenge is living well.

      You seem like a self-starter, and not everyone is cut from the same cookie cutter. And in my opinion, you are much better off trying something new when you’re young enough to bounce back if it goes south (not that it will, I’m just saying) than when you’re older and there’s a family or other obligations for which you are responsible.

      When you’re older, you tend to splat, not bounce 😉

      Good luck.

    • Mike says:

      The downside of dropping out is that it can be hard to go back, especially if you’re making a few bucks.

      *IF* you actually have started a business that’s got a chance over time, one that you can see yourself sticking with for decades, I’d suggest you stick with that. If you’re family has a problem with that, tell them you’ll take one class a year if they’ll pay half the cost.

      But realize that a lot of business fail through no fault of the entrepreneur. (And more fail through bad management). You may have to start all over again from nothing. If you’re the kind of person who can deal with that, and with the prejudice that you will encounter against the un-credentialed, follow the path you’re on.

      I was not mature and ambitious enough to run a company at 18. College was the right choice for me.

  4. Realist says:

    forget college! I did it and I’m in deep debt without a job that can pay me enough to live just above a minimum wage lifestyle and pay the loans back. I worked hard by dedicating myself to college (followed professors advice)in order to graduate with honors. I have not had one job offer above $9.00/hr. I cannot pay my loans back at that wage and it’s frightening. If I could do it over again, I would have never ever went to school. I graduated from my state’s college so it’s not some no name school. I’m in such a financial bind that I may have no other choice but to return to school for a master’s program. I have plenty of contacts at my university, but even they’re telling me that the current job market is dismal and that grad school admissions have boomed. Therefore, this fall I’ll be back in school to specialize in a technical skill not the loopy liberal arts crap I was encouraged to dive into as a freshman. I majored in Classics but took several economics/business electives as well as gaining a Geography minor focusing on economics/business in East Asia. Come on, I should have a decent job right? Employers turn me down by stating they like my college credentials but want someone with 5 yrs. experience. Well, what the hell do you think I need to get experience? a job in a field that relates to my college coursework! I’m not looking for dream pay but a mere $22 grand a year would mean I could scrape by paying bills. I’m finding the crappiest of jobs that only require the minimum of high school. It’s really a shame and a waste. I might as well have lowered my sights prior to college and just become a life long customer service rep. thus I’d be without an edu-mortgage of $38 grand (and climbing thanks to interest).

    For your information. If you did attend a 4 yr. for marketing? You only take 20-26 hours in your major. That’s just 8-9 classes. The majority of your classes will be “taught” by a half-engaged professor (or maybe a grad student) delivering a Powerpoint lecture that accompanies a severely overpriced textbook. Occasionally you do get a great professor but it’s rare. The other courses are made up of fluff subjects that will serve no purpose in your life. College can help with networking, but real world experience works to the same effect. In fact, college may be a better option later once you have experiene. You’ll be better set up to evaluate theories and explain them from real life knowledge. The majority of traditional college students majoring in business have no experience thus cannot make sense of the information they’re acquiring in class. That fact makes discussion or group work a trying experience unless you enjoy helping everyone else along. Having business experience will put you ahead of the curve. You will stand out, be in a position to lead the group which will give you an edge. Quite frankly, in business that edge gives your image a boost. We all know that in business your reputation soars if you appear to lead the pack.

    I’m not the only one I know with a ton of loan debt and no job prospects worth taking. I have several friends in grad school that are panicking about getting out soon. They’re probably hitting $60-80k in debt. I have one friend who’s worked on several political campaigns and so forth. She has a stunning resume full of prestigious contacts but the job offers? she’s struggling and considering a Phd program to avoid the job market right now. These aren’t stupid people! They’re being hanged by loan debt. But the job market is suffering from recession mentality thus employers are being more honest now by letting us know that they really wanted experience in the first place.

    Education worth it? What a shameful lie! You have to research and forecast your job prospects well ahead of school. You cannot just “try” college. You cannot consider various majors (advisers love to tell freshman this crap). Only the financial aid freeloaders have the luxury of enjoying college w/o having to give their investment much thought. Colleges are a business set up to suck your money into their pockets. Once you’ve met any folks that are a part of a college’s administration? You’ll see what I mean. They have no understanding of fiscal responsibility. I’m waiting for the financial crisis to trickle down to the educational loan sector. Any day now…

    • Anonymous says:

      Sorry you’re not employable. I would be surprised if all the people in your graduating class have the same story. I’m sure most of them have jobs by now. Sorry.

    • Tommy says:

      I read your story and couldnt believe it! I can imagine that is me 3 years from now. Im going to County Coll of Morris because its cheap and like highschool. I wish you best luck trying to find a job and GodSpeed trying to pay off the student loans.

    • Kay Iscah says:

      This is a good illustration of why you should go to college with a purpose and not just go to go. In some fields college gives you a definite edge, but in others, it really is a waste of time and money. There are jobs out there that just want you to have a degree of some kind which a general liberal arts may help with. But it’s not a guarantee of work.

      Education is important, but whether a college education is “worth it” depends on what you want to do.

  5. netta says:

    Realist, thank you for your story. I have several friends right now wrestling with Sallie Mae over student loans for school debts. Although these are well-educated and very smart people, they are also in the vortex you describe. What kills me is how the auto and banking industry can get a bailout, but students have gotten no breaks whatsoever.

    I hope things get better for you soon.

  6. Amber Storck says:

    Having a college degree isn’t what it used to be. I went to college and got a degree – graduated with a 4.0-Deans honor list. It didn’t make getting a job any easier. Every job I got (4 over 8 years) had massive layoffs due to jobs going oversees. If I could do it all over again, I wouldn’t have gone. It cost me $20,000 – which I paid back in 4 years, not 10 years allotted by working 2, sometimes 3 full time and part time jobs. Getting ahead is very difficult. You would go to college to make good money, right? Well – if you’re already making good money and doing what you like, mission accomplished – without a degree.

  7. Amber Storck says:

    Side note:
    If college were free – I WOULD go – but it never is.

  8. Melissa says:

    I do make minimum wage and know that the place I work for will never give a raise. I work only part time and have no car, so I can’t get another job. I didn’t ask to be born and would rather be dead. I would be better off. I have no health insurance and my grocery budget is $20 a MONTH.

  9. Dave says:

    I live on minimum wage. It’s pretty awful to have to skip meals at the end and beginning of the month so that you can pay rent.

  10. poor says:

    if i did the math with my rent and minimum wage i would have 3.33 cents to spend a day. thank god i make a whole extra dollar than minimum wage. i can spend 4 dollars a day 🙂

  11. Steven Lang says:

    This is a post with great intent. But by not determining the actual numbers, you have more less created a flawed and misguided conclusion.

    If you make $14,500 a year… you likely pay NO federal taxes. The standard deductions along with the state sales tax deductions would cover at least 80+% of your taxable income.

    If you are the head of a household, you will likely get a tax credit and refund for all your voluntarily procreating.

    You also get…

    Food Stamps
    Free Cell Phone (with 400 minutes a month)
    Tuition Credits (should you chose to improve your skills)

    In addition, your kids get a free breakfast and lunch at school. Should you get tired of all this government subsidization there are also plenty of religious institutions and non-profits that are more than happy to help folks in need.

    The real question that should be answered in your article is , “How well can you live on $14,500 a year?”

    So long as you avoid people with low morals… and take car of your family’s needs first and foremost (along with your own) the answer is ‘quite well’.

  12. Laura says:

    @Steven Lang:

    I don’t know what planet you live on, but obviously you’re the one with the flawed and misguided calculations.

    At 14,500 / yr (1208/mo-gross)in most states in the US a person would NOT be eligible for food stamps or Medicaid! It’s above the income cutoff. In MD for example, if you gross =>1,180 you are Not eligible. In Texas you would Not be eligible. Most states are pretty close to that…feel free to check it out before you make false statements.

    Yes, you can get probably get a Pell Grant to pay for tuition and part of books, but there are more expenses than just that to be able to attend. Now days you are pretty much forced to have Internet for school and Transportation is a huge cost.

    Housing eats up most of the rent. Unless one is willing to live in the pits of hell and put their life at risk.

    Morality does not figure into this equation and is another issue entirely. Reality check needed on both accounts.

    • unity says:

      yeah laura. thank you for addressing this idiot
      who knows nothing about living on minimum he makes 50,000-60,000 a year

  13. 1234567chatango says:

    Wow, 12,335. That is a lot to me and it’s no longer whatever year this article was posted. I get by on less than 1/12 of that. That’s right, 1,000 in a whole year.

    I don’t work or own a home. I just about live in a car but haven’t had a valid driver’s license, registration or insurance since initially obtaining them to purchase the car.

    Yet, I’m doing fine if not great. I manage to earn enough money scavenging (no handouts whatsoever) that not only am I able to eat, I was able to save enough on the side to buy this very laptop that I’m using.

    Water and electricity is virtually impossible to not find for free (public fountains, open outlets located outside most if not all businesses, etc). As we speak, I’m situated in some neighborhood pirating someone’s wireless internet.

    I don’t get what everyone else’s problem is. Maybe you should have gotten a job right after high school instead of choosing to leech off your parents for another 2+ years at college. Heck, you could have done both at the same time! Or maybe you should have held off having a kid that more than likely has ended up a huge burden of a failure on society.

    White picket fenced home, multiple cars and a large family; is that all really necessary in an overburdened society?

    Whatever your situation, it’s probably, kind of, entirely your fault and was very much preventable.

    • unity says:

      your not living, if you only got a 1,000 a year. your not just fine or great pal. get a grip on reality. you know your ass is stressed out everyday and wishin you had more. c’mon now,who you foolin?

    • john says:

      what a load of crap. dumpster diving!!! get a life you troll and stop with the hippie live in a car propaganda

  14. Chris says:

    I had 2 jobs and lived with my girlfriends mom and her for years .I got tired of it .So I stole from areas where people had money did 3 years prison .Will never regret it .I used to regret but know I see I have been a good person the entire time .I even told the police many crimes they had no idea about because I felt bad I wouldnt have even went to prison . I knew there was no way they could know I did the crimes .

    I have no problem finding mininum wage jobs that are brutal and back breaking .Daily Labor sweat shops are every where . I do not mind washing dishes for life but if I can not live on the wages why am I gonna work to just eat hell their is deer and hogs all over the place .But the problem then is rangers ,police ,people . I know how to make water well ,test water disinfect a well .But why would I want to to become a reculse I am a social being . I want to work ,eat have sex and live my life .I dont know how a grown man can live on $7.25 Im not gonna try either because its just no possible unless your gay and are sucking someones else dick literally .

    I can see someone living on those wages about 8 years lets say about 10 .I see it possible only if you live with another person or have section 8 or are a women with a kid getting assistance but for grown men its just not a possiblity thats why we here grown men killing people and filling up jails people still have it got it yet .A child can not live on $7.25 how they hell is a grown man going to

  15. Nikki says:

    Very sad numbers! When will the Government open their eyes? The Government NEEDS to recognize that Americans will never be able to Boost the Economy of the United States if we can’t even afford to pay for gas to go to work. I live in a family of four 2 adults and 2 children. Both my significant other and I drive 35 miles one way to work, that’s 140 miles a day. I wish the Government would relax the burden on it’s majority population and redirect their attention.

  16. F*ck This says:

    I am often saddened by the fact that I was born in this country, called falsely by the arrogant “The greatest country on earth”. My Father who is COLLEGE EDUCATED worked two full time jobs when I was growing up. he went to work at 7am and didn’t come home until 1am. That’s 16 hours a day EVERY WEEKDAY just to barely afford to live in a one bedroom that he wasn’t even able to sleep 8 eight hours a night in. Just to barely feed a family of 4. Just to come home at night and realize he has no time for leisure because in a few hours he will have to go to work again. I used to think of myself as lucky to be born in a rich, developed country. I used to actually thank God for that… Until this “greatest country” decided it was my turn to be bent over and given a beat down. Now I’m being put in this awful position. Not because I’m “uneducated” or “don’t deserve it” or I’m “lazy” but simply because I was born by chance in a 7.25 minimum wage country. F*ck that!

  17. Kay Iscah says:

    I actually wrote a book and maintain a blog on exactly how you do that. Biggest help is to cut rent and utility expense by sharing the cost with roomates of some kind. Live a healthy life style (no smoking, no drugs, no gambling, keep alcohol moderate or tea total, eat properly and stay active). Ideally minimumwage would be a temporary situation for entry level workers, most people will be able to demand better salaries as they gain experience and raise their level of education. I wouldn’t recommend starting a family while on minimum wage, but it’s enough for an individual to get by in most cases/places.

  18. Salty Crusty Dog says:

    For reasons of wanting to live life early instead of saving up for my funeral, I live on $500 a month on a boat in the British Virgin Islands. This is the kind of money anyone can make working 3 days a week at a part-time MacJob of the type that can be found anywhere, anytime. However, I engineered my lifestyle to live on that amount. With money I saved up, I bought an older cheap, used 20 foot sailboat for $1,900 and live aboard it. I live without electricity, plumbing or refrigeration. I don’t pay slip fees because I anchor out. I have a one-burner propane cooker, I use a thunderbucket for a head and I shower with an insecticide sprayer. My sink is a plastic pail. Lighting is provided by kerosene lamp. I am primarily a fruitarian/vegetarian but also eat fish I catch myself. I am an excellent cook and prefer Indian/Vietnamese food which is cheap and simple to prepare from inexpensive, basic ingredients. Hell on earth? Maybe for some. Me, I spend my days sailing, fishing, hiking, reading and enjoying the good life simple tastes and self-reliance have endowed me with.

  19. Salty Crusty Dog says:

    In case anyone is interested here is the simple $500 a month budget I live on:

    Food: $125 (rice, lentils, fresh veg and fruit, cereals, nuts…basic vegetarian diet)

    Boat: $125 (maintenance, annual haul-out…)

    Savings: $125 (this goes toward building my “sh*t happens” fund. At present it has a balance of $4,680)

    Everything Else: $125 (kerosene, propane,a little gas for the outboard, spending money).

    I buy my food at retailer’s cost because I work in a grocery store and made a deal with the owner to get paid less in exchange for this concession…I have to eat anyway and buying my food this way is more efficient(less expensive overall than buying at retail with money. I drink water and iced team I make myself and nothing else. I also eat VERY well (dals, vietnamese Pho soups, killer salads, fresh fish I catch myself, cook and eat the same day…). I cured myself of diabetes on this diet.

    I have a degree in math and physics and tutor kids for a few extra bucks to replenish the “sh*it happens fund” when I have to draw from it. I buy clothing when I need to. My only electronics include a battery-powered VHF radio on the boat and an iPad on which I store all my books and music, surf the internet and use Skype to communicate.

    Most people would call me dirt poor. In fact I am filthy rich with the most valuable commodity of all- MY TIME- in plentiful supply.

    • john says:

      lets see how well off you are when your 70-80 and your money is gone.

    • point of view says:

      I like what you are doing-even if not understood by everyone. Part of the problem, is that people believe that there is a universal answer for everyone. What works for one may not be good for another. I teach my children that it is what you do with what you have. One person has chosen the boating lifestyle because it works for him. Another person may want the millionaire dollar mansion. You will always find critics for what you are doing and the choices you have made but justification partly lies in how you defend yourself.

  20. Whatsagirltodo says:

    With the economy the way it is, you can’t even find a job, let alone find one making decent money. Now somebody please tell me this, I don’t have a problem working, but how are you suppose to live, survive, eat, and pay rent, etc. on a part time job, paying $7.60 an hour with flexible hours. If I wanted to find another job, I couldn’t because of the job I currently have which is flexible. Most part time jobs in sales want you to be flexible. The only way you can get around getting another part time job, is, if you get a job working for a major firm/company. Why can’t jobs period be more understanding to your needs, when it comes to hours. If you work part time at least give you the same hours every day; just in case you have to or want to get another job to go along with that one. I don’t understand for the life of me why these sale/store jobs won’t be more understanding to people’s needs. Could they live off a part time, minimum wage, flexible job? No, I don’t think so, so how do they expect you us to.

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