I ask this because a lot of advice about personal budgeting presupposes the reader has high means, such as the piece of advice “Make sure your rent is no more than 30% of your income,” when that is infeasible for Americans making minimum wage (or the infamous “just borrow a few thousand $ from your parents”).
What kinds of adaptations have you learned on low income? What strategies does one use when financial security is not a given?
Get a roommate to lower your housing/utility costs.
Pinch pennies everywhere you can, and more than anything focus on getting higher paid job or developing skills/education that can enable you to get a higher paying job.
If you continue working minimum wage jobs, you’ll never do anything better than save yourself from drowning financially. Your only long term hope is increasing your income potential.
As someone who had a lot of experience and success doing this for a number of years, I have some advice.
Eating out? Never. It’s bad for you and way overpriced compared to what you can prepare for yourself. If you get invited out, get water and a food you don’t eat often.
Speaking of, groceries were my biggest expense after rent. Go to Costco, buy healthy foods in bulk (frozen chicken, frozen veggies, rice, eggs, carrots), then mix it up throughout the week with different sauces/spices. Again, just stick with water (tap with a filter).
Next, get a $30 month cell phone plan or lower.
Cut the cable. You can’t get by without internet, but you can watch a lot of good, free content on Youtube/Roku without cable TV.
I was able to get by without a roomate for awhile, but found I saved a lot of money when I moved in with my girlfriend. We split rent, internet, power, and gas, both saving a lot of money.
Don’t get caught up in gift exchanges. I didn’t need more “stuff” in my life and people would forget whatever I bought for them. Personal cards are much cheaper and go further.
You can find a lot of good clothes at second-hand shops in big cities. I would recommend paying full price for a good coat and at least one good pair of shoes ($100-200).
After that, it depends on your career and romantic relationship goals.
Health care:
Don’t smoke, not only is smoking expensive but the long-term health risk will cost you a lot of money later in life.
Watch for health fairs, sometimes hospitals will sponsor a health fair that for a small amount of money you can get full lab work and minor health tests done for a small amount of money.
Take care of your teeth, I know that Dental students are quite often looking for people to practice in their clinics. Putting off dental care will cost you a lot of money in the long run.
Walking and riding a bike whenever you can will help keep you healthy, a healthy lifestyle costs very little money.
When I was suuuuper broke I would spend a day every week calling the questions or comments numbers on the back of products, then I would tell them that I just wanted to say thank you. I would sincerely tell them how much I liked their product and they would always ask for my address and send me crazy good coupons in the mail. I got a bunch of free products and food that way when I really needed it.
Having good friends and a strong support network helps a lot. Even with the best budgeting, shit always happens eventually. Having people who can give you rides, help you get a job, hook you up with free stuff, fix things, or let you crash on their couch for a while can make a world of difference sometimes. Look out for others when you’re in a position to help and they’ll do the same for you.
The library. Use it! It’s not just for books!
Find out what your library has to offer and use the hell out of it. Music, movies, free tickets and passes to local museums…libraries have so much to offer.
Many allow you to check out tablets. Some have a library of “things” with everything from kitchen equipment to garden tools, all yours to check out for free. Many offer free tax filing if you meet an income threshold.
Use your library!
Learn to cook. Get a toyota. Get a deep freezer and stockpile on loss leaders. Youtube things you can do yourself like changing tires, brakes, fixing a leaky toilet. Don’t be lazy. Mow your own grass, go get your own damn food.
Quit smoking, doing drugs and drinking. Quit going out all the damn time.
In most cases, I think 30% is achievable but beyond what most people are willing to suffer. On minimum wage it would almost certainly involve being roommates, or living in unconventional housing.
The first strategy I would go back and share with my younger self is, pay a lot of attention to how much you spend on food. Learn how to cook tasty rice and beans by adding spices or toppings like a little shredded cheese. Learn how to get the best deals. Get a chest freezer and use it to store clearance deals. Drastically limit eating out. Minimize junk food like candy and chips.
About equal in that equation is how to save money on auto expenses. In this day and age, it is pretty easy to learn a lot about a subject quickly via youtube and here on reddit. Learn how to buy a car that is cheap AND reliable. Learn how to do basic maintenance. Learn how to do minor repairs. Learn how to get the best resale price when you move on to another car. Shop for the best value in insurance. Learn how to avoid paying interest on loans as much as possible. Learn the value of a pre-purchase inspection (PPI).
There’s a sub called poverty finance. Check it out for practical advice but don’t let them pull you into a victim complex.
Alot of advice about budgeting in here. So let me try something different. If you’re in this situation you’re priority needs to be getting out of it. Find a way to bring in more money. Best advice I can give is go to a trade school. A plumber, electrician, welder will always have a job.
I know there disabilities and so forth that prevent people from being able to do this. But if at all possible this needs to be your top priority.
Learn to cook.
Take advantage of social programs. Visit your local department of social services and sign up for everything you can.
Visit food banks. They are for more than just homeless people. They are for low income people too.
Cut your standards. Don’t expect a big house. Should spend more time outside anyways, it is healthier. And being healthier saves money.
There are plenty of places in the USA that minimum wage can actually buy a small home and afford life. Got to research it though. Ultimately though, you should find a career path that brings you past minimum wage.
Go to your local community college. Get the Pell grant. They are practically paying you to go to school. This will help you avoid minimum wage too.
Before going to college though, make sure the local area has jobs for that field. Don’t want to tac on moving expenses if you can help it.
Don’t get exotic fruits from the store. They are usually a waste. And to add to that, figure out your local agriculture and when they do their harvesting. You can freeze pretty much anything fruit/veggie and make a smoothie out of it for a healthy meal. So stock up at the farmers market closest to you when in season.
I’m not low income anymore, but I was at the start of my career and this is what helped me the most:
Strategy:
Pay your bills first, starting with your house. You can go without eating, but not without shelter. Responsibilities come before pleasures.
Cut out anything you don’t need, no cable, no subscriptions, if you need to watch Netflix etc find someone you can share the account with. Library has tons of free movies and e-books. Some even have whole series.
Freebies:
I’m a big fan of freebies, join a “Buy Nothing Group” – sometimes there are things you can find for literally nothing that you might need.
Food:
My university had a food pantry and so did the Salvation Army. You could just go in for non perishables. Lots of rice and tuna, sometimes I’d fry an egg on top. It’s one of my favorite dishes.
No car at the beginning, so every grocery trip had to count. I’d buy the on- sale meat and frozen veggies. Frozen veggies as nutritious as non frozen and you get the advantage that they won’t spoil so you won’t be wasting money. Make as much food as you can at home. You can put everything in a slow cooker in the morning and when you get home there is warm food waiting.
I shared a big-box membership with family (Sam’s Club) so when I had car access I’d go and get big packs of necessary items like toilet paper. Always got the cheapest brand.
Gifts:
If anyone asked me what I wanted I’d ask for giftcards to grocery stores or just $$$. If someone gave me a nice item I’d just save it and re-gift it to someone else when I needed a nice gift. Also, if I wanted to give someone a nice gift I’d get others to pitch in and we’d do it as a group gift.
Healthcare:
I was low income but still worked, I signed up for the ACA (in US) – literally a lifesaver for me at the time. I believe I paid around 20 a month at the time, which was cheaper than the alternative which is the school’s health insurance that was 2,000 a year (University required Health Insurance)
Income:
I learned a trade at a local technical school while I was doing my Bachelor’s. It was the shortest (and cheapest) program they had lasting around 5 months and it was at nights. You could pay it in 4 parts. I went from making 10 bucks in retail to an average of 16-20 an hour. This allowed me to buy a car and be a little more comfortable. I moved to an apartment with 2 rooms so I could have a roommate and cut down on my costs.
Car:
Bought a car outright. 3000, and only one owner. Nothing fancy, but it worked. I loved that car.
Housing: I had roommates then, and frankly while I can afford to live on my own, I rent out space in my house. It helps to have that extra $$$.
First thing is being honest with your situation.
– yes I’m broke, because I graduated with student loans and haven’t found a job yet. Cool, now realizing your situation is what it is- do what you have to, to make the most of it.
Live at home cheap/free. Get multiple roommates. Use coupons, cook at home, get a second job. Don’t get comfortable.
r/povertyfinance was created for this type of information. Not that you can’t ask this question here, but you might find some good info over there
If you in big city with transportation get rid if car, unlimited metrocard in new york is 120 dollars, and you can get anywhere
You’re not entitled to live alone. If you’re making minimum wage, find a roommate or move back home.
You do not need cable. Internet is a must. You will simply stop caring about watching shows illegally. KissCartoon, and Putlocker are your best friends.
Learn how to make your own laundry detergent. You can control the smell, it makes your apartment smell nice, and it saves you tons of money
Learn to cook healthy (chicken, pasta, rice, veggies, spices). It’s less expensive in the long run, and will save you money on health expenses anyways. If you’re going from unhealthy to healthy, the transition is rough simply because your body isn’t used to the nutritional shift
If you’re going to splurge, do it on:
+A solid coat
+A bike (you’d be surprised how bikeable your local area is)
+An office chair (back pain can be prevented with proper posture)
+Boots. A solid pair of boots often last longer than simple tennis shoes
If you’re going to get a credit card, get one that does Cashback on groceries and/or gas to help with expenses
If you do above credit cards and have become financially insecure, most banks will offer a payment plan
Have condoms ready. The only thing worse than being financially insecure is introducing the chance of a child. Wrap it up. Every. Damn. Time. (I’m gay, but this is just something I’ve noticed with my straight friends)
Black tea is a great alternative to coffee
The duhh advice is to either make more money and/or move some place cheaper. Warehouse jobs and Amazon drivers are making $18/hour in some very affordable places. They hire anyone with a pulse.
That’s $36K a year. That means your rent can be $900/month. If you get a roommate, that should be affordable.
By definition, you can only cut to $0. But you can make more money.
Join the military so they pay for college for free and choose an MOS that has a good translatable career outside of the military. Then major in computer science or some healthcare profession and go to grad school for it. Profit, you’re no longer poor for the rest of your life. It’s literally that easy.
I’m going to echo the other comments that I think one of the biggest is learning to cook and just cutting back on any extra expenses (subscriptions, memberships, drinking, etc). Eating out a lot (even fast food) and buying a lot of pre-made meals really adds up.
Edit to add: Also, financing way too expensive of a car for their income!! People seem to not be willing to give that one up but I know so many people with $500+ monthly payments that don’t make huge incomes. I know some people with $700 and $900 payments to get their “dream vehicles” that they struggle to pay… seems insane to me!
This post contains advice about food, home goods furniture, gas consumption, budgeting, entertainment, and cell phone.
Do not eat out. Do not order food. If possible, try to see cooking as a hobby! If you like something geeky, try to find a cookbook for that franchise to page through to get inspired.
Buy food based on what’s on sale that you like, not just what you want. This also helps prevent food boredom (which I have found can feed into other emotional downer time) because you’re forced to buy slightly different things every week with the sales. (I live within an hour of Portland and eat meat every day & mostly organic produce on $15/week using this method and primarily shopping at Safeway.).
Buy in bulk where the per ounce/pound price is super cheap, and get some food storage. My buy prices for meat are: $1.50/lb for pork chops, less than a dollar/lb for chicken (check the freezer for 10lbs bags of chicken leg quarters! usually priced at 0.68/0.70 per pound ultimately), and $3 or less for beef (steaks, roasts, and ground beef).
(Interestingly, cell phone service can also be bought on the cheap in bulk; I use a service called Mint Mobile that I pay for once a year in bulk, at a rate of about $14/month. I get unlimited everything with 3gb of 4GLTE data.)
I know bulk is hard on a budget but it DOES pay off long term. Stagger your major purchases.
Rice, pasta, and potatoes make great cheap bulk (admittedly, they’re an ouch if you’re watching your calories though…)
Generally speaking, cheap junk food is far more expensive than fresh vegetables and meat using this method. If you can spare the time – or can make a hobby of cooking so you don’t mind the time – this will save you big!! Plus I have bizarrely found fresh vegetables/meat to be way more filling/satisfying than most junk food items. When I eat pre-made/boxed/canned food, I find myself craving more, more, more in a way I just… don’t as much with the stuff I make.
Never ever let things go bad in the fridge/etc! If it’s gonna go bad, even if you’re not into that tonight, that’s what you’re eating!!
Another valuable skill is patience for the living goods you want, waiting for them to show up for free/cheap on Craigslist or in a thrift store. Most of my furniture – and I have good metal or solid wood items! – I got for anywhere between free and $40 a piece off people who just didn’t want their stuff anymore.
Thrift stores are your best friend for clothing and home goods. Why pay $10 for a T-shirt from Wal-mart – or $20 or $30 for something nicer from somewhere else – when you can get any type of clothing for $4-8 per item at a Goodwill? If you’ve never been, you’d be surprised how most of it is basically like new. Pans, shoes, decor, cooking tools – they have it all for a fraction of what you’ll pay elsewhere.
Drive conservatively; go 55mph on the highway. Walk to the store/library/etc if it’s nearby. The improved gas mileage/savings add up (my car has a factory highway MPG of 28; I get 32 in the winter and 36-38 in the summer doing this)!
Also, budget budget budget. Keep track of everything you’re spending so you can be aware of when it’s time to be tight on the coin purse strings – and when you can afford to pick up that new game console, because you know everything else is taken care of for the month.
Lastly, choose entertainment that is endlessly repeatable for the fee or free.
Changing jobs, especially is you have security, is scary, but the best way to increase salary is to be open to other opportunities.
College lean debt is frowned upon, but look into community College both for undergrad credits or for trade certification.
Live with a many roommates as you can tolerate for as long as you can.
Save for emergencies so you don’t need to borrow.
Calculate your taxes accurately. Don’t hope for a big refund, it’s better to have that cash throughout the year.
People at all income levels can get into the comparison game. It’s ok to designate a portion of your budget for “fun” but labels/ brands are designed to fuck you over. Don’t waste money on name brand clothes or shoes or cars
You can live quite cheaply but you may not like the tradeoffs. For some it means not owning a car, for others it means living with roommates. In my experience not working a full time job is a bigger reward than being able to buy more stuff.
Plan your cashflow. When I was living paycheck to paycheck I would dread those weeks when my paycheck would arrive a few days after my rent was due. Would my landlord cash the check before I was paid? General monthly budgeting wasn’t enough for me; I needed to track the timing of everything so I wouldn’t get hit with overdraft fees or a bounced check. By setting up a cashflow tracker in excel, I was able to plan my spend around paydays and big expenses and minimize moments when my balance got near to zero.
Second job or side hustle. Not only is it extra income, but you don’t have time to do anything else that would cost you money. That’s how I got on my feet, 60-100 hour weeks (60 is sustainable, 100 you can only realistically do for 3-6 months)
Live with your parents if they are still around. I know for some that’s tough, but if you are single you can surely live with them and save money and invest in some good stocks and crypto for a good year.
Work full time, eat at home, play free games, don’t have kids.
I’m sorry if this is easier said than done but that was my personal recipe for the last 3 years being the most profitable years of my life.
My biggest learning around low wages is that you need to grind twice as hard to find a higher paying job than you grind for your actual job.
Low paying jobs are unironically usually the most demanding and inflexible jobs compared to higher paying ones. So it’s easy to get overwhelmed and complacent and feel stuck. There’s so many people I know that end up working the same dead end kitchen prep job or service job without making it anywhere else because they don’t feel like they have the ability or energy or time to move up.
You should be interviewing for higher paying jobs at least a couple times a week if you’re making minimum wage. There’s literally fast food options paying double the minimum wage. There’s companies like Costco and Trader Joe’s that pay better salaries. Hell, you can make 10x what you’re making now by getting a car sales job and they’ll give anyone a chance who is presentable and reliable.
Honestly, the same rules of personal finance don’t apply to poverty or minimum wage lives. Sure, avoiding as much debt as possible is still relevant, but nothing applies the same when it comes to building wealth and managing finances. The ONLY way to get out of it is to find a higher paying job, and they are out there. I’m not saying it’s easy but it’s necessary unless you want to live in poverty forever.
Shop at marshals Walmart. Do you really need that “new” whatever it is? Don’t get into debt. It’s all common sense really
I recommend trying to pay off any debt you have first (this way you can then put money aside and not feel stressed) if no debt then I would put the monthly away for rent etc then look at what you have left! Look at what you buy, do you need it? Smoker? Quit smoking and instead of spending the money put it in savings. Shop for cheaper food, don’t buy branded buy smart food/shops own (save a whole load of money). Analyse your bank statements, see what payments weren’t necessary and add up your spends (I was surprised how much I actually spent every year on Starbucks)
Peanut butter & bread. Steam rolled Oats at the feed mill 50lbs for 20$. Water. Cell phone plan ‘bring your own unlocked phone’ Visible is a Verizon clone. Unlimited for 30-40$ mo. Never lease a car. Try to buy your home, rent is throwing money away.
Be sure to take advantage of any low-income special rates your utility companies offer. I don’t know if these are offered in every state but in mine they’re available on all of them.
Also, if you’re so inclined, consider volunteering at a local food bank or community service agency; even just once a month if you’re able to spare the time. You’ll build contacts with people who provide aid to low-income individuals and know all the ins and outs of receiving services. I did this and when it really hit the fan at a point in my life I knew exactly who to go to for help and had a good idea of what services were out there to help me get back on my feet. You might learn about things you’re already qualified for. I’m always surprised when people don’t know about all the programs available but then remember that I had built a really good network of assistance providers from social workers to little old ladies who grow extra food in their gardens for others. Also, volunteering to help others makes me feel better. I didn’t often feel as poor as I was because of the connections I made in my community and the feeling that I was really doing something worthwhile with my life.
Always cook food. Don’t buy premade stuff. It’s cheaper and higher quality. Plus, then you get good at cooking, which is a great skill for attracting a mate that can help provide. This is a tip for both men and women.
Where you live really matters. I managed to sock away about a third of my income while living at minimum wage levels, but I love in a relatively lost cost of living city in Canada.
Here are a couple of ideas that really helped me. I live in a tiny 1BR apartment, and work retail. I haven’t bought paper towels, sponges, or cleaning products in the 3 years I’ve lived here. I invested in a collection of eCloths instead. Also, I bought a small portable washing machine that hooks up to my kitchen sink, and a retractable clothesline that I put in my bedroom. Using the apartment laundry area costs about $10 to wash and dry. My tiny washing machine has saved me a fortune.
1. Public library for media entertainment internet.
2. Take care of your health healthcare #1 cause of bankruptcy
3. Finance is mostly about proper decision making don’t have kids or pets if you can’t afford them ect.
Really it all comes down to decisions don’t be a victim or have a victims mindset.
Is it infeasible to not spend more than 30% on your rent? Not getting into any discussion about minimum wage, but when your income is too low, your no longer looking at living on your own. Your now looking at living with roommates.
When we started out, we paid a bit more than 30% (it was like a 1 1/2 weeks for “rent money”), but that also included heat and electricity..when we could not afford anything else, you will eat a lot of noodles. At the time we could make 4-5 packets of those broccoli cheddar noodles you find in the store, a dollar each packet, with some other vegetable or mashed potatoes and then leftovers for lunch at work.
So how do you do it? You have to adapt your wants to fit your means.
30% of pay on rent is outrageous, ESPECIALLY if you are low paid.
Stop trying to rent a four bed house as a single adult, rent a room.
If you live in a small town then get out. Pick a non high cost of living city and move there. Lots of people grow up poor in small communities and stay there because that’s all they know and they aren’t aware how the economy of a city scales. Do anything that pays. If kellogs workers go on strike because they think $18-$33 isn’t a fair wage for them then take their job.
Work 2 jobs if you need to (easy IF you don’t have kids) or do something on the side. Insurance companies generally only require a GED to get into the door and that’s a great way to start. OR get a side gig in your spare time.
Surround yourself with a good community and just as important DO NOT surround yourself with people that will have a negative impact on your life.
If/when you make more don’t immediately change your standard of living to match your increased income. This is a trap that many people fall into across all income levels.
EDIT: always have food at home. When you can afford it stock up on essentials like canned and boxed goods. Don’t eat out. Yiu can be late paying a bill but not eating for more than a short period of time will impact your ability to take care of yourself and others.
the 30% rule is because its very hard to live on less then 70% of your income, make that 40% after taxes…
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Food and actual needs are the biggest ones, however in all honesty this is starting to shift, which is terrifying. Unhealthy food is always cheaper but at least if you make it at home its cheaper, but some of the deals at fast food places are starting to come VERY close to the price of making it yourself like the 2 for 5, 2 for 6, etc type deals at BK or McD etc
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Another Huge savings is not spending money on shit you don’t need… the VAST majority of people don’t need more then 15/1 internet, they just want it. Almost every wireless carrier gives free shit away like netflix or Hulu, take advantage of them.
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and use a budget mgmt software like Mint, it is HUGE as far as telling you what you spent on what. also, use a CC mgmt tool like Privacy. when you are running on pennies, getting hit with that “oh shit I forgot to cancel Xbox Live 3 months ago when I got it for a dollar” really sucks. Privacy stops that from happening
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