Yesterday one of my clients 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 a 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:
- Phone (People will say this isn’t necessary, but I have a child. No way would I go without a phone.)
- Car insurance
Note that I left out my car payment – if I was 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
- 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: $1065
Okay. 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 $1200 a month before taxes qualifies for $165 in food stamps. Even if I could make that cover ALL the groceries for the month, that only leaves me with a little over $100 a month for everything I didn’t list above.
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 Hell 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.
And can we talk about appliances? As my regular readers know, I’m kind of a disaster when it comes to preventing my appliances from breaking. In my time as an adult, I’ve gone through 4 washing machines, two dishwashers, and more printers than I want to think about. Even on a salary significantly higher than minimum wage, if it hadn’t been for DIY repair sites like PartSelect, I never would have kept them working as long as I did. And let me just tell you, things like that are NOT cheap to replace!
Looking at these numbers, is it any wonder that 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 only qualify 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?