1. Get out of debt
If you’re only making minimum wage, you can’t afford to be sending money to a car financing company, Visa, MasterCard or Discover.
Think about it this way: If you had no house payment, no car payment and no credit card payment, what’s left? The only bills you may need to pay would be utilities, taxes, insurance, gasoline for your car and food for yourself. In many areas of the country, you could do that on $15,000 a year.
Now, housing is a major problem, I know. On your income, it might be easier to sprout wings and fly to Paris than own a home without a mortgage. We’ll talk a little more about affordable housing options in a minute, but for everything else in your life, make living debt-free a priority.
2. Hoard gifts of money, tax refunds and other windfalls
To get out of debt and build up your savings, you need to make smart use of all those times you run into a little extra cash.
If you make minimum wage and have children, chances are you’re entitled to the Earned Income Tax Credit. That could mean you get thousands of dollars from Uncle Sam each year. What are you going to do with it?
You might be eyeing the ripped couch in the living room and thinking it would be nice to have it replaced. Or maybe you’d like to buy the kids new bikes or even take a trip somewhere.
Until you get on firm financial ground, resist the urge to spend those windfalls. Put a couple hundred in the bank as an emergency fund and ship the rest off to your creditors. If you’re debt-free (hooray!), bank at least half of it before you think about spending a cent.
Do the same with other unexpected money, whether it’s the $5 you find in the parking lot or the $50 your aunt puts in your birthday card.
3. Save your pennies
Literally. Start a change jar and put your coins into it every night. At the end of the month, roll up the coins and put them in a savings account.
You won’t retire rich off the money you collect, but you could end up with $10 or $20 a month to pad your savings account. That’s not much, but when you’re making $7.25 an hour, every little bit helps.
4. Skip processed food
Although I have never lived on minimum wage, I know all too well the feeling of barely scraping by. When you’re living that close to the edge, I realize sometimes you want to be able to open a box and cook dinner or swing through the drive-thru for the dollar menu. After all, life is hard; can’t one thing be easy?
It may be tempting, but you’ll feel better and save money on health care costs in the long run if you say goodbye to the canned, boxed and frozen meals. If you need some menu inspiration, check out budget cookbooks from your local library. “Family Feasts for $75 a Week” and “The $5 Dinner Mom Cookbook” are two you may find worth reading.
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5. Park the car
After housing, your car is probably your biggest money pit. You need to pay for insurance, registration and gas, plus you might even have a monthly payment on it.
You’ll free up tons of money in your budget if you can get rid of your car or at least drive it less often. Depending on where you live and your personal situation, you may be able to:
Sell the car and use public transportation exclusively.
If you’re a two-car family, sell one vehicle. If both adults in the house work, see if you can get opposite shifts or find jobs close to one another so you can drive together.
If you have years left on a vehicle loan, sell the car and buy a cheaper one. If you owe more than it’s worth, consider using your tax refund to pay down the balance so you can unload the car and its payment.
Carpool with a co-worker or friend and split the car costs.
Combine errands and appointments to minimize gas and parking costs.
6. Rethink child care
Child care is crazy expensive. If you have two income earners in your house, and both are making minimum wage, you might come out ahead if one adult stays home with the kids. Not only will that eliminate day care, you’ll also save on gas and other work-related expenses.
If that’s not possible, read this article about other ways to lower child care costs.
7. Sell what you can
Get serious about saving by scrutinizing everything you own.
You could have a yard sale to sell old clothes, trinkets and kitchen gadgets, but think bigger. Sell the furniture you don’t need. Sell your movie collection. Sell the TV. I’m serious! The kids will find something else to do.
Having to sell your stuff may seem rotten, but if you put that money into savings, it can be incredibly freeing. It’s a great feeling to know that if the car dies on the road, you have money in the bank and won’t need to frantically call friends to help pay for a tow.
8. Find a roommate
Let’s go back to the housing problem we mentioned earlier. Let’s face it: Finding affordable housing can be a nightmare. Subsidized housing is available, but wait lists are long and the properties aren’t always in ideal locations.
If you can’t find a place with cheap rent, the next best thing may be to get a roommate. Another option might be to rent out a room if you are in a house. Either way, you get a break on your monthly payment as well as on the utilities.
You can find potential roommates on websites like Roommates.com and EasyRoommate.com. Sites like Craigslist or your local paper may be good places to place ads if you have a room to rent.
Regardless of how you find a roommate or renter, be sure to double-check their references. A background check, obtained through your local police department, may cost a few dollars but can be worth the peace of mind. Make sure you’re not letting anyone potentially dangerous into your home, especially if you have children.
9. Move somewhere cheaper
Maybe despite your best efforts, you simply can’t find an inexpensive place to live. In that case, it may be time to do something radical. You may want to move to a new city or a state with a lower cost of living.
That isn’t permission to simply pack up and go without a place to stay or a plan for what to do when you get there. Instead, do your research first and line up a job in advance.
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10. Make more money
Finally, if none of these suggestions sounds like much fun, it’s because it’s really hard to get by on very little income. You know that.
To make more money, you could work harder or you could work smarter. Choose the second option. Rather than spending your life working two or even three jobs to get by, get the right education and training for a career that will let you live comfortably.
Look into jobs that require only a two-year associate degree. According to the Bureau of Labor Statistics, these are some of the fastest growing jobs in the country. The incomes listed are the median wages earned by workers in these occupations in 2012.
Dental hygienists — $70,210.
Diagnostic medical sonographers — $65,860.
Web developers — $62,500.
Occupational therapy assistants — $53,240.
Physical therapy assistants — $52,160.
Wouldn’t it be nice to be making $50,000 or $60,000 two years from now? It’s not a pipe dream. You can do this.
Talk to your local community college to find out which careers are in demand in your area. Their financial aid office should also be able to help you learn about programs that can pay for your tuition and eliminate the need to take out student loans.
Those are 10 ways to maximize your money when you are living on next to nothing. Let us know what you think about these suggestions in the comments below or on our Facebook page.
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