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How do people survive on minimum wage?

You know it's not much, but once you crunch the numbers you see just how meager it is.

By MSN Money Partner Nov 9, 2011 7:46PM

This guest post comes from Andrea at So Over Debt.


One of my clients recently reported getting a job at a fast-food restaurant. Since she's been unemployed and desperately looking for work for nearly a year, I was thrilled for her. She was very excited that she'll be making $7.50 an hour -– a whole quarter more than minimum wage.


After she left my office, I got out a calculator. I've never worked for minimum wage, so I didn't know exactly how much -- or how little -- money that is.


Assuming 80 hours per pay period, my client will be bringing home around $462 every two weeks. That's with no health insurance or retirement contributions.


If I brought home $924 a month, would I even be able to survive? I decided to find out.


My minimum-wage budget

First, I decided which of my expenses are absolute necessities. This is what I came up with:

  • Rent (My parents own my home, and I don’t currently pay rent, but most people do)
  • Utilities
  • Food
  • Phone (People will say this isn't necessary, but I have a child. No way would I go without a phone.)
  • Car insurance
  • Gas

Note that I left out my car payment. If I were making minimum wage, I know I'd have to drive something, but not something with a huge monthly payment. So I'm pretending my car is paid off.


The budget in action

Here's how those costs would add up:

  • Rent: $400 (the amount I would be paying if my parents would let me -– I realize it would be much higher in some areas)
  • Utilities: $200 (current average of electricity, water and gas for my house)
  • Food: $200 (assuming we could survive on $50 a week)
  • Phone: $25 (prepaid phone)
  • Car insurance: $100 (full coverage)
  • Gas: $140 (this is what I currently spend to drive to/from work)
  • Total: $1,065

OK. I ignored my car payment. I don't have anything fun, like cable or Internet access. And I'm still over budget by about $100.


What about government assistance?

I checked on that. In Kentucky, a family of two making $1,200 a month before taxes qualifies for $165 in food stamps. Even if I could make that cover all the groceries for the month, that leaves me with only a little more than $100 a month for everything I didn't list above.

Post continues below.

My son would qualify for Medicaid, but as an able-bodied adult, I wouldn't. So if I got sick or had to take a prescription medication every day, I'd fly through that $100 in no time.


How the heck does this work?

There are so many things I didn't account for in my minimum-wage budget. Clothing. Car maintenance. Birthdays. Christmas. School field trips. Toilet paper and toothpaste.


With these numbers, is it any wonder so many people are in debt? Personally, if I knew I was going to spend more than I made just to exist, I’d try to drown out that misery with TV or Internet access at home, even though I know I couldn't afford it. I'd probably use store credit cards to buy clothes (if I could even get approved for them). Payday loans would be my backup plan for emergencies. And retirement? Pfft, what's retirement? I couldn't even afford to get my oil changed!


Honestly, the first thing I would do is drop my car insurance. This would free up another $100 a month, but I would risk getting a ticket or totaling my car in a wreck. I don't even want to think about what would happen if I was injured while driving and had no insurance of any kind.


I complain about my student loans constantly, but if I hadn't gone to college and could qualify only for minimum-wage jobs, there is simply no way I could make it. Even if I made stellar financial choices at all times, I would run out of money every month. I can't figure out how any single parent could make this work.


Could you make it on minimum wage?

I feel like I must be missing something here. With 4.4 million American workers making at or below minimum wage (and remember, I gave myself an extra quarter an hour), there has to be some kind of secret I don't know about. It hurts my soul to think that there are people struggling with this every day -- not because they are curious but because it's their reality.


Have you ever worked for minimum wage? How about doing it while supporting a household? Could you find a way to alter your budget to make it work?


More on So Over Debt and MSN Money

Nov 9, 2011 10:55PM
First of all, I can always tell the ones who have not been there. They always think they have all the answers. I have. I am a single mom and have been out of a job for 2 1/2 years. You learn to cut back as much as you can, we freeze in the winter and we sweat in the summer, because you cannot afford the utilities. In order to afford groceries, we only eat one meal a day, and that is pasta and whatever you can find real cheap. Clothes you either get at garage sales or salvation army. The list goes on. It is not easy. Yes I have internet because I use it for job hunting and what little work I can find. If it wasnt for my parents helping me out, we wouldnt survive, we would be on the streets. And it is not that easy to get money to further your education, I have looked into that also, plus when you live in a small town with no college that makes it even worse. And I pray that my car doesnt break down, cause then I would be on foot. I would love to see the government live like I have to, then maybe some things would change.
Nov 10, 2011 4:22AM
i pay 350 a month for rent, 300 a month in utilities, I own my car (thank god but it took three years of yogurt of dinner!!) but other than that, I am paying paying paying just so my children can have a warm bath and ONE heater in a three bedroom house. I consider myself lucky because I make nine bucks an hour. Or I did, until this morning, when they almost shut off my lights AND water within an hour of each other. minimum wage is a ridiculous blight on our economy. I've worked every day since I was fourteen years old, never been on welfare and never been out of a job for a month at a time. you people on your high horses need to climb down. im not  a *welfare mom* or WHATEVER. I'm an AMERICAN. and I'm broke, and cold, and hungry. MR. OBAMA CAN KISS MY BUTT. i can't even afford a haircut, and his haircuts cost more than my house.
Nov 10, 2011 9:59AM
It won't do any good to raise the minimum wage if the cost of live keeps raising. In my area a 1 bedroom apartment cost $850 to $1250, no utilities included, minimum wage is $7.50. No one can afford that.  Regulations need to be placed on utility companies and landlords.  The $7.50 per hour wage is a joke, that's all. 
Nov 10, 2011 11:24AM
I have done that. Thankfully a friend worked at a chicken place and gave us leftover chicken- you can do a lot with chicken. Extra money came from sewing and cleaning jobs.  Kids got gifts from goodwill or Yard sales supplied a lot also or what I could make. It still hurts to remember that i could not get new things to them or give gifts for their friends birthday party like others.  Had a Pinto then remember those?  bought from friend for 25 a week.
I have lived out of the country and am thankful for all we do have here. Kids had insurance and the youngest WIC without that it would have been very hard.  Is it fun no did I learn from it yes. Do I want to help others in that place yes. Do I get frustrated with people who complain when they can work but don't and expect all to be given to them YES

Nov 10, 2011 5:39AM
most people say that minimum wage is for kids at entry level and not meant for people to raise a family on but in these days i see more and more people having to live off of and support a family on it it is pure corporate greed
Nov 10, 2011 10:00PM

I make a bit above minimum wage right now running a bed and breakfast in Santa Fe, New Mexico also have my housing taken care of and left-over breakfast. Work between 50-65 hours a week.


Just  a few years ago I had a house with 7 toilets, a 6 figure salary with a big corp , fancy cars, 30 year marriage, and even owned a small hotel. Laid off from the Corp job. Lost the hotel to bad "partners" led by a crooked attorney--(we never did anything wrong--they stole my business and then ran it into the ground). Lawsuit--they filed one but never acted on it---just a hollow accusation, bankruptcy and lots of pain. Partners are good for dancing and one other thing. My life was "over"!


 Thought about suicide...all my moorings were gone. 53 and can't find a "real" job despite having an knock-out resume and 30 years sales/management experiance .Had a meltdown and drove off with some carpentry tools to New Mexico. One of the poorest states in the US--but fantastically beautiful and full of positive energy. Had to start over from scratch.


I sold my car, did some painting work and got an old truck. Saved money working at the B&B and bought 20 acres of land in Northern New Mexico. Got a payment of $600./month on the land for 10 years--owner financed. Have a nice fire-pit and a 34 foot travel trailer for $3800. Going to build a solar home--very small, grow veggies and maybe learn to create something--art, crafts, small farming--whatever.


"SO WHAT" YOU MIGHT BE THINKING---so now is the time for the people in the US to reinvent ourselves. I can see it in these posts and in the trends going on....tiny houses, low energy use, grow your own food, stop the mass consumerism, redefine success, DO WHAT YOU ARE HAPPY DOING instead of just working to pay the mortgage and keeping up with the Jones'. My pain has been a gift to help me change. I am lucky and I appreciate still being alive.


Many, many many people here in Santa Fe and Taos, etc work for minimum wage...yes it is hard---but we drive old beater cars, help each other out and don't have to keep up a false pretence to impress others. Here it is about what you create instead of what you buy. Santa Fe is the 2nd largest art market in the US. Lots of folks cut wood to keep warm and spend the winter doing their brand of creativity. Working with their hands and souls instead of...what I used to do in order to keep living in my McMansion. (Worked for a large consulting firm)


I have no insurance (except car), have few possessions and am learning that happiness doesn't come from external sources. Don't get any handouts, working so I can pay my land bill and enjoy being in the New Mexico wilderness. I have a new appreciation for my fellow beings. I was within a few weeks of being homeless. I know now how much work it takes to be poor. We did everything "right" college, wonderful kids, 401k, perfect credit score--we were "millionaires"!! BFD!


Now I focus on being compassionate, volunteer helping others and limiting my "waste trail".

Don't dumpster dive----but understand how that can happen. Next time you see a poor person try to be compassionate and loving instead of judgmental. It could be you who are hungry and tired in a year!


Nov 10, 2011 6:39AM
Wow now I know why I like our province, our minimum wage here was 9.00 an hour but got bumped to 9.50 an hour and was supposed to go to $10.00 an hour in September but I never found out if that happened -- will have to check on that  with My 18 yr old daughter.  She makes that and it is her first job ... she said she will never work in the states.  Yes we have higher sales taxes but that pays for the Healthcare here.  You CANNOT make it on minimum wage in the United States period .. You just explained that.
Nov 10, 2011 1:52PM
This is such a volatile argument, I hesitate to weigh in, but here it goes:  Minimum wage is absolutely not a living wage.  It is really only suitable for school age workers looking for a little cash and people who work as a hobby - i.e. they really don't need the money but like to get out of the house and pick up a few bucks while they're at it.  The people I know who work in these types of jobs for their livlihood seem to know where to find assistance for the basics - heating assistance, food assistance, Food pantries, Goodwill, yard sales,free clinics, etc.  Far from ideal or easy.  For entertainment these folks use public transportation (not available everywhere, I know) public parks, and their local library for computers and internet, DVDs, books, classes, and more.  Libraries are under utilized and completely free.  Bottom line: in order to earn a living wage, a person must have either an education or a trade and be willing to work more than 40 hours per week as is referenced in the article.  Willingness to relocate for better job opportunities and better money is also helpful. 
Nov 10, 2011 5:44PM
I work for minimum wage; my husband works for minimum wage. Neither of us do credit cards because we have common sense. We only buy what we need and we save all that we can for the holidays, birthdays and any special occasions that come our way. We do not have health insurance, have just the one car and we live within our means. The saddest thing is I am surrounded by people who have never had to work, who have never even moved away from their parents...and yet they are the ones that are beyond miserable and act as if the world owes them something.

I have a strong feeling that if people had to live in the real world- a world where someone's hard work gets one what one has and does not include parents or others to prop them up- then the world would be in a much better shape because people would have more empathy. You think it is hard playing the How To Survive Game? Try living it. Suddenly people might understand why those who work the hardest appreciate things the most instead of having the world handed to them and having to find reasons to be miserable.
Nov 10, 2011 1:49PM
Yes it is illegal to drive without insurance but if you are living on 10 or 15K a years of course you drop it and takes your chances. What are they going to do to you. You have nothing to take and if you go to jail you get food, lodging, health care, etc. If you are destitute you are in survival mode. Laws become irrelevant in your behavior and decisions.
Nov 10, 2011 12:53PM
If you are an adult and you are making minimum wage, then my observation is that you are a person of resolve and perseverance. You probably could live off the system, but instead have the pride to work instead of taking a handout. My hat is off to you. If able, check out the opportunities abroad since you can live a much fuller lifestyle on a lot less money. I wish there were more people like you folks.
Nov 9, 2011 11:23PM
XYZ....I think the trouble with thinking that everyone "should" or "must" get a education is kind of hypocritical....the people that say that will use the services of the minimum wage worker....let's use McDonalds workers as an example....I know it was designed to use teenage workers to keep the wages lower but who is working there on the weekdays for breakfast and lunch while the teenagers are at school?....if someone is working....don't they have a right to at least be able to afford a basic apartment, food and the other things listed in the list of this article?....people say how mad they are at the people on welfare that do "nothing" to earn their living (myself included)...but I think the article was about people that WILL work to earn their living and also provide a service for everyone (the "upper" thinking people too)....again....the "Upper" Educated will buy products or use the services that a minimum wage earner provides because everyone wants to get the best value for their money instead of insisting that ALL people be paid a FAIR wage so they can pay for at least the bare necessities of life when they're at least working and trying not to get on welfare because again they are making products and providing services that everyone needs or wants INCLUDING the UPPER THINKING THEY HAVE A CHOICE TO BE LIKE ME PEOPLE...really Big Businesses are being subsidized (Corporate welfare) because most pay so low (even when they have such high profits) so we the Tax Payers have to pick up the Unfairness of their High Profits and not paying fair wages (meaning then taxpayers pay for the foodstamps, welfare, medicaid, subsidized housing allowances, earned income credit tax refunds, etc etc etc for minimum or low wage earners) our society we need to be FAIR to both the Working Class and the "Upper" (Thinking) Class because they're ALL needed BUT if everyone wanted to be the Higher Thinking "Upper" (Educated) Earners and Big Profit Makers who'd be left to man the McDonalds, Walmarts, Pick the Foods that we all eat, Clean the Restrooms that we all use, Clean the dishes at the restaurants we ALL eat at, Make the Beds and clean the rooms at the Hotel and Motels that we ALL use...etc etc again....QUIT THE HYPOCRITICAL THINKING PLEASE....we need all working levels in our society but ALL workers need to be paid FAIRLY!!!
Nov 10, 2011 8:09PM
As a single person with no children I am not eligible for EIC or any of the other welfare things that having children provides (thank God I don't have to worry about a child too). There is no public transportation here. I walk when I can and plan my vehicle trips to do as much as I can when I do drive.   The news is always telling us about the unemployment rate.  Only that rate has no idea how many people are not in that percentage anymore, because we aren't in the "system". I haven't bought clothes- new or used- in years.    The rents in this town are based on those who do receive a government housing allowance meaning the rate can be jacked up since other tax payers are paying.  Moving to a better area, where there may be jobs. ... May be jobs, but more than likely there are already people there looking for work.  And when is the last time you moved?  Costs quite a bit of money to move, even across town.  Unless I find a job that pays decently (I'm not saying alot) I am looking at being homeless in the middle of a New England winter.  Oh yeah, to those who think room -mating works.  Easier said than done.  Some people won't pay their way or are absolute @$$'$ to live with.      My parents are dead, and I helped them, not they helped me.
  The people with all the smart @$$, easy answers haven't had to deal with the problems so many of us are dealing with- YET.  Wonder how they'll feel when it happens to them.  This country NEEDS a Revolution !
Nov 10, 2011 3:57PM
I think the trouble with thinking that everyone "should" or "must" get a education is kind of hypocritical.....In our society we need both the "Upper" (Thinking) Educated Class AND the Working Class because they're ALL needed BUT if everyone wanted to be the Higher Thinking "Upper" (Educated) Earners and Big Profit Makers who'd be left to man the McDonalds, Walmarts, Pick the Foods that we all eat, Clean the Restrooms that we all use, Clean the dishes at the restaurants we ALL eat at, Make the Beds and clean the rooms at the Hotel and Motels that we ALL use...etc etc again....we need all working levels in our society but ALL workers need to be paid FAIRLY!!!
Nov 10, 2011 1:28PM
 I have a family of 5 (plus grandmas and great grandmas that I often feed), and I have learned how to stretch the budget . After becoming disable in the last year, one really learns quickly. So, here are some of the things I have figured out.

first, you're assuming that you had enough to buy a car (even one that is "cheap") up front. you can sell just about anything on 4 wheels for $1000, and since everyone needs $$ these days, they're going to try to get as much for a vehicle as they can. I don't know many people who have even $500 saved up.I've seen some for less than that, but if it is cheaper, it should be a flag and not worth the savings you might have. you'll spend more on repairs to keep the crummy car running than if you'd buy a better car to begin with

second, save $$ by nixing your gas $$ by buying a buss pass. I know many folks have opted to do this given the distance they need to commute and the cost of gas.

food wise, you make soups, stews and pasta, etc. they can be stretched far and really don't require much in the way of $$ per meal. meat goes farther if cut and served properly. Oddly enough, those dishes are some of the favorites in our house. Comfort food is really comforting. If you have extended family with whom you share meals, ask them to buy a loaf of bread to go with the spaghetti... something inexpensive (under $5.00) and everyone will feel better about the meal.

for clothing, check 2nd hand stores and garage sales. I have found new clothes (tags still on) quite often by going to the better stores. the thing is, kids grow so fast that it's not worth spending a lot . most likely they will be grown out of before they get worn out.

and last.. realize that what you have is more than someone else. When you lose income or never really had it to begin with, it makes you realize that things really could be so much worse than how it is in your life. Believe me, I had to get over my ego and learn to work with what I've got. And get on with it!

take care

Nov 9, 2011 9:56PM
If the Federal minimum wage kept pace with inflation over the last 30 years or so, it would be almost $11/hour...and here in Ann Arbor, MI, it's pretty hard to live on that (even WITHOUT a car)

As I see it, it's IMPOSSIBLE to live on only $7.25/hour!!

Nov 10, 2011 9:52AM

If you are on min wage, an apartment by yourself is a luxury - you need to share housing.  If you are driving an older beater, full coverage car insurance is likely excessive.  Like the other posters mentioned, you need to work more than 40 hours a week-maybe much more.  I have a good paying professional job, but I didn't advance my career by working 40 hour weeks.  I don't think most people did.  Most skilled laborers and trade people I know work quite a bit more than 40 hours a week.  And for the min wage workers who are dependable, hard working, and pleasant, they are not condemned to minimum wage for life.  When I used to work in fast food, the business men and small business owners would often offer jobs to those workers who fit that description - seems there is always a shortage of clean, pleasant, hard working people who can please the public.

Nov 10, 2011 7:50PM
Ok  I have lived on 8.50 an hour for   5 years until i finally got my well deserved retirement at age  55.  
Being a single dad,  the earned income, the food stamps  son on medicade, and food banks, was how we survived. Shopped  thrift stores only and if  I seen something out by the road for the garbage I  could craiglist for sale  I stopped and ask for it. It can be done but it is not easy.  We didn't take a vacation, go to the movie, eat out, at all durning the  5 years.  I grew a garden, at parents home, and we would go to the  creek  for a swim in the summer until gas went to   4 bucks a gallon then that was out. So I know it is more than minimum wage but it  can be done.  I also paid  330 a month in rent  utilities 85 a month  internet 34  a month and magic jack phone which is  20 dollars a year .  so i was getting internet and  phone for  36 dollars a month  quite a steal i think. no cable  used rabbit ears. I also had  some money put back that I would buy a used car from time to time and clean up and resale and make a few dollars on but  a couple times  i lost money. Those months were hard as heck because it  took our extra saved money  that was there for an emergency only and it had to be replaced somehow.  both son and i picked apples   during apple season to earn a few extra dollars as  we also did   picking strawberries too.  Did a  whole lot of canning of the garden  harvest.  And now  We look back and we really dont live much different  its just we  now know we can pay our  bills and have money left over .  Thank you Greyhound  lol   
Nov 9, 2011 9:22PM

First, persons in the $1000 income range are usually using public transportation, biking and walking.


Second, face it parenthood is wonderful but it can also make the lives of the youngest persons much worse. Take the necessary measures to plan your family.


Third, face it everyone needs some training beyond high school in order to make a living. It doesn't have to be a $100k bachelor's degree. Community college tuition runs $100 an hour sometimes and two years spent there in a well chosen major will bring in $30k quickly. School bus drivers get a commerical driver's license and training for free. Hiring yourself out as labor to a small contract can help you learn plumbing and electrical and a night course at the tech college can get you into HVAC work. These all pay very well and are even in high demand in small communities. A forklift course will get you a cushier job with better pay at the factory. A aircraft manufacturing course can easily get you $25 an hour starting. The public university bachelor degrees run $32k. There is financial help, especially for the people in the biggest pinch.

Nov 10, 2011 10:00PM

I am glad to see the writer of this article did not try to Sugar-Coat living on minimum wage.  Trying to live on the minimum means many things:   roommates,  no healthcare, coin laundromats, a lot of walking/bicycling, and a fast track to the Permanent Underclass.   One you've been forced to live this way for awhile,  your clothes are worn and shabby,  your skills are defunct,  you grow older - all of it adds up to:  UNEMPLOYABLE,  with little or no marketable skills.   Any education you had, becomes stale.  


There is no silver lining to this story.  More independent, adult Americans are forced to work for minimum wage now than since the 1950s,  and costs of everyday living have skyrocketed, putting many things out of reach, even by 1950s standards.   The 1%, of course, does not care.  They want ALL of the 99% forced down to minimum wage, so they can be pushed around at will.  Many people are still "doing well" financially, in the $40K - $100K income range, but it is only a matter of time, before THEIR jobs are "outsourced", and they are faced with a barren job market.  It's only a matter of time, for many millions of Americans. 

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