Is your income too low to use any of the typical money-saving strategies? Here are 10 ideas that take cost-cutting to a whole new level.
By Maryalene LaPonsie on March 2, 2016 / Photo (cc) by stevendepolo
Are you squeaking by on minimum wage? If so, it might seem like there is little hope for you to get money into savings. After all, working full-time on the federal minimum wage of $7.25 an hour brings in a whopping $15,080 a year before any taxes.
But even if your budget is down to the bare bones, there are still things you can do to build up your savings. Here are 10 ideas worth considering:
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 might 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.
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, make smart use of any extra cash you get.
For example, 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.
Until you get on firm financial ground, resist the urge to spend windfalls. Put a couple of hundred dollars 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.
3. Save your pennies
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
Processed food often is unhealthful. You will feel better and save money on health care costs in the long run if you say goodbye to 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.
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:
· Use public transportation exclusively.
· If you’re a two-car family, sell one vehicle.
· If you have years left on a vehicle loan, sell the car and buy a cheaper one.
· 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 daycare costs, but you’ll also save on gas and other work-related expenses.
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.
8. Find a roommate
Finding affordable housing can be a nightmare. Subsidized housing is available, but waitlists 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. if you live in a house, might be to rent out a room. 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.
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.
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.
Talk to your local community college to find out which careers are in demand in your area. Its 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.
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