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How to save on minimum wage

Yes, it's difficult to save when your pay is low. But here are some concrete steps you can take.

By MSN Money Partner Apr 23, 2012 2:06PM

This post comes from J.D. Roth at partner blog Get Rich Slowly.


Get Rich Slowly on MSN MoneyIt can be tough to get out of debt and build savings even if your income is above average. If it's average (or less), the challenge becomes even greater. And what if you're earning only minimum wage (or something a little over)?


Image: Piggy bank (© Brand X/Corbis)In cases like this, is saving even possible? Recently, a reader named Andrew asked this question on the Get Rich Slowly page at Facebook:

Hey. I have a question. I am going to be gainfully employed again, and it's going to be starting a dollar above minimum wage. I'd like to be able to save even though most friends of mine think it cannot be done. How can I save even though I'm living on slightly above minimum wage?

I love this question. Andrew should be applauded for his desire to get ahead financially even though his income is limited. That's a great attitude.


Before I share some suggestions, I should note that in order to achieve big financial goals, Andrew will eventually need to make more money. I'm guessing he already knows that, though. For now, let's focus on making the most of his current income.


Because his income is relatively low, Andrew's only choice is to cut costs. In order to have money left over to save, he has to reduce his basic expenses. That's easy to say, of course, but it can be more difficult to put into practice. My top recommendations for cutting costs quickly? (Post continues below.)

I think his first step should be to tackle the big stuff:

  • Housing is the biggest budget-buster for most people, and if Andrew can keep this cost low, it'll help him create a surplus he can save. That means finding a cheap room for rent, or sharing an apartment with a roommate -- or maybe even living at home with his parents.
  • Transportation is another huge expense, and if Andrew can keep his costs low here, that'll allow him to build savings. His best bet is to opt against owning a car (unless it's too late). If I were making minimum wage, I'd travel by walking and biking and riding the bus.
  • Food can chew up the cash, too, which is probably why Get Rich Slowly readers tend to love articles about how to make the most of your food budget.

I also think one key to being able to save while earning a small income is to reduce recurring monthly expenses. For instance, if you're making minimum wage, I think it's a good idea to skip the cellphone. (If you need one, use a prepaid cellphone instead of carrying a contract.) Don't have cable television, subscribe to magazines or join a gym. In fact, don't sign up for any sort of ongoing recurring expense. These expenses are like anchors, especially when your income is limited.

By doing these things, Andrew should be able to keep his expenses low so that he's able to end up with a surplus. And what should he do with this surplus? Open a savings account, of course! If he doesn't have one already, he should build his emergency fund so that he's prepared for the stuff life flings his way.


Those are my suggestions for Andrew. What are yours? If you were (or are) making only minimum wage -- or a little above -- what sorts of things would you do in order to save money?


More on Get Rich Slowly and MSN Money:

Apr 23, 2012 3:38PM

..and also don't forget to limit yourself to one sixpack a week, drink it at thome and do not leave the place no matter what.  Smoking has become excessively expensive, this is the time to quit; besides,  smoking is kind of bad for your health even if it goes great with your beer.


Of course, eating out has to be strictly limited.  Using your kitchen and your culinary skills will keep you within your budget. Plus, if you're a couple cooking at home can be really fun.

Apr 27, 2012 5:49PM
In short, you can live with a parent and party. Or, you can live in a studio apartment or share a very cheap place with a roommate. It's one or the other until you move up the food chain or get more education & change jobs.
Apr 30, 2012 6:09PM

xyz i will never forget you coward

are u dave ramesy and what did the police tell u?

ill find out eventually and u are at the top of my payback list of arrogance

u better never forget because i wont

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