If you’re earning the minimum wage, you might not consider it a living wage. After all, it can be hard to cover the cost of living in many places if you’re only paid the federal minimum wage of $7.25 per hour. But you don’t have to resign yourself to living a bare-bones existence if your wages are low — it’s possible to live comfortably on minimum wage and enjoy it, too.
Last updated: Oct. 18, 2019
Create a Budget That Prioritizes Needs
If your income is limited, make sure it covers your needs first. “Food, shelter, clothing and utilities are needs,” said Donna Freedman, author of “Your Playbook For Tough Times. “The rest is just a series of wants.”
Creating a budget can help. List the expenses you have to pay to survive. Add them up, and then subtract them from your income. If there’s not much left over, you might have to make some sacrifices. Don’t think of cutting out wants to cover needs as deprivation, though — think of it as a smart use of available funds, Freedman said.
It can be tempting to turn to credit cards to cover costs. But one of the keys to living comfortably on a minimum wage is to avoid going into debt, said Bruce McClary, vice president of communications at the National Foundation for Credit Counseling.
“If you are making minimum wage and your budget is stretched to the limit, debt is poison,” he said. Having to make high-interest payments on your credit card debt will leave you with less money for the things you truly need.
Build an Emergency Fund
If you’re living on minimum wage, you might not think you can afford to set aside money each month in an emergency fund. But would you be able to afford an unexpected cost without savings?
“The thing that keeps you out of debt is to find room in your budget to grow your savings,” McClary said. You won’t be able to build your savings quickly, but if you can stash away a little each month, you can fall back on your emergency fund rather than go into debt when something unexpected happens.
Take Advantage of Tax Breaks
When you file your tax return, take advantage of tax breaks for low-wage workers — such as the earned income tax credit. To qualify for the 2019 tax year, your income must fall below certain limits: from $15,570 if you’re filing as single, head of household or widowed with no children, to $56,000 if you’re married filing jointly with three or more children.
If the credit you receive is more than the taxes you owe, the IRS will refund you the difference. That tax refund can be used to help pay off debt, build an emergency fund or cover additional expenses.
Eat at Home
Food is an essential expense, but it’s one that you can control. The best way to do this is by cooking at home rather than eating out, Freedman said. Unfortunately, nearly 44% of Americans’ food dollars go toward meals that aren’t prepared at home.
Plenty of websites provide recipes for meals that are cheap, easy and delicious. Freedman also recommends using Google to type in ingredients you have plus the word “recipes.”
“Getting creative with what you have on hand versus shopping or calling the pizza joint accomplishes two goals: You stay under budget and you clean out the fridge, freezer or pantry rather than leave foods to waste,” she said.
Cut the Cost of Groceries
“Being smart with your food dollars doesn’t mean subsisting on cold oatmeal and six-for-a-dollar ramen,” Freedman said. “Delicious, easy-to-prepare meals are possible on a tight budget.”
The key to saving money on groceries is planning your weekly menu and shopping list based on what’s discounted at the supermarket. Check your grocer’s website for its weekly ad, or pick one up as you head into the store. Also, browse your supermarket’s clearance rack for deeply discounted items and the “manager’s special” meat bin for items marked down 30% to 50% for being near the sell-by date.
Find the Deepest Discounts
Don’t limit your deal hunting to groceries. McClary said you should spend extra time pursuing the deepest discounts on all the goods and services that you use. You can scour sites such as Slickdeals for the best prices on items you need, RetailMeNot for coupons and Cardpool for discounted gift cards that you can use at supermarkets, gas stations or retail stores.
Cut the Cost of Insurance
You might be able to free up room in your budget by lowering your monthly auto insurance premium. “Ask how much you would save by raising your deductibles or whether it’s appropriate to drop collision,” Freedman said.
Also, shop around to find the best deal on auto insurance — you might save money by switching insurers.
Keep Down the Cost of Utilities
Even if you can’t keep up with the cost of your utilities on a minimum wage budget, it doesn’t mean you have to resort to bundling up in blankets all winter just to stay warm or sweating it out in the summer.
Freedman recommends calling your utility providers to see if they offer reduced rates for people in financial trouble. Or, if you live in a state with a deregulated electric or gas market, shop around to see if you can get a lower rate from another provider.
Sell What You Don’t Need
You likely have hidden sources of income lying around your house — things you don’t need that can be sold. “Electronics, bicycles, collectibles and even toys might fetch a fair amount,” Freedman said. “Someone paid me $1,200 for a little plastic baseball figurine.”
So, scour your home for items you can advertise on Craigslist and Facebook. You can also sell them on eBay or to a consignment store.
Buy Used Rather Than New
You can outfit yourself, your kids and your home for less by buying gently used items at a thrift shop or consignment store. In fact, you can often find quality items that are deeply discounted, McClary said.
The key is to shop at resale stores where more affluent people live. McClary said he once found a brand-name sports coat for $10 at a thrift store in a nice neighborhood near Chicago.
Take Advantage of the Public Library
The public library offers plenty of freebies that can make life more enjoyable — and affordable. You can check out books for free or borrow DVDs and CDs for no-cost entertainment.
McClary said public libraries also typically offer free Wi-Fi, so you can get online to find more deals, compare prices or search for better-paying jobs.
Find Free Things To Do
“You certainly want to do things that can add joy to your life,” McClary said. But when you’re surviving on minimum wage, you should find ways to have fun that won’t leave you in debt.
Fortunately, there are plenty of free things to do in every state, from museums to hiking trails to public concerts. Check your city government’s website or community paper’s website for a calendar of events.
Take Advantage of Workplace Benefits
If your employer offers any workplace benefits — such as subsidized health insurance, a flexible spending account or a retirement plan with matching contributions — you should take advantage of them.
You might have avoided signing up for benefits because you didn’t want to have money taken out of an already small paycheck. But employee benefits can save you hundreds of dollars over time. Even if you work part time, you might still qualify for benefits, so check to see what’s available from your employer.
Find a Second Job or Other Opportunities
Taking on a second job — especially if you’re already working part-time — can help you go from scraping by to living comfortably.
You might even be able to make money without a 9-to-5 job by taking surveys at sites such as InboxDollars and Opinion Outpost, testing websites or participating in online juries.
Get a Job With Tips
When the company that she was working for closed down, Catherine Treme, a behavioral finance blogger, said she was able to live comfortably on a small income by working as a Lyft driver.
“With the tips, it made things a lot easier,” Treme said. She had a lot more wiggle room in her budget thanks to the extra cash.
Get a Roommate
Another way that Treme was able to live comfortably on a small income was by splitting housing costs with a roommate. If your current accommodations aren’t big enough for two, find someone who is looking for a roommate on sites such as Craigslist, RoomieMatch.com or even Facebook.
You might be able to reduce your biggest monthly expense by moving to a smaller or older space, McClary said. “You don’t need to live in the newest, most modern apartment or house,” he said. “There are more competitive deals for older structures.”
If you live in a place where the cost of living is high, consider moving to a city where your paycheck stretches further.
“Take a moment to consider where you can relocate to find the same kind of employment opportunities but in an environment that’s much more affordable,” McClary said.
Don’t let pride get in the way of reaching out for help so you can go from barely getting by to a more stable existence, Freedman said. There are plenty of public and private entities that can help.
Start by calling 211, which is the community services clearinghouse run by the United Way. It can connect you with local agencies to find assistance, but remember to be specific about what you need. You also can get help dealing with debt and budgeting issues by visiting NFCC.org to find a free or low-cost credit counselor.
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Taylor Bell contributed to the reporting for this article.
About the Author
Cameron Huddleston is an award-winning journalist with more than 18 years of experience writing about personal finance. Her work has appeared in Kiplinger’s Personal Finance, Business Insider, Chicago Tribune, Fortune, MSN, USA Today and many more print and online publications. She also is the author of Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances.
U.S. News & World Report named her one of the top personal finance experts to follow on Twitter, and AOL Daily Finance named her one of the top 20 personal finance influencers to follow on Twitter. She has appeared on CNBC, CNN, MSNBC and “Fox & Friends” and has been a guest on ABC News Radio, Wall Street Journal Radio, NPR, WTOP in Washington, D.C., KGO in San Francisco and other personal finance radio shows nationwide. She also has been interviewed and quoted as an expert in The New York Times, Chicago Tribune, Forbes, MarketWatch and more.
She has an MA in economic journalism from American University and BA in journalism and Russian studies from Washington & Lee University.