Is minimum wage really that hard to live on? I was at a friend’s house last night for a small party and met a girl there she mentioned that she chose Hawaii because it was a place where you could do a lot of the things you enjoy for free and a lot of people don’t really focus on career paths. She then also mentioned that she would be happy living on minimum wage because it wouldn’t affect her lifestyle much… besides becoming slightly infatuated for the rest of the evening, I realized I had my next blog post set when she said that she could live on minimum wage quite confidently. Even though she said she could, is living on minimum wage possible?
What is minimum wage?
In the U.S. the current minimum wage rate is $7.25 (it may have changed depending on when you’re reading this post so check the post date). Based on that pay rate let’s do a little math.
In a given year full time workers put in approximately 2,080 hours. Multiply that by minimum wage and they’ll be pulling in $15,080 yearly ($1,257 monthly) before taxes. The tax rate for someone in this bracket is 15% for federal, state taxes will vary, we’ll simply use the 15% here to estimate on the low end. That means take home would be $12,818 a year, or $1,068 a month.
What can you buy with that?
How far your money goes will depend on where you’re living of course. In any part of the country you can probably find a decent place to live, most likely with roommates, for about $400-$500 a month. You can also fit in groceries for about $150, and your utilities will be about $40-$50. You may also have a small clothing allowance of $20-$30 a month if you thrift. Using a high estimate you’ll spend about $750 a month on expenses, which will leave you with $300 a month in disposable income. What you do with that will be above and beyond what it necessary to survive so things like eating out or recreation.
So is living on minimum wage possible? Yes, I think living on minimum wage is possible. I even wrote a post about how I do it, a few months ago. However, I think that if you’re even semi-ambitious you’ll move beyond $7.25 an hour in a very short period of time. What you do with your excess funds at that point is up to you, but realize that worse case scenario, you can survive on minimum wage with proper money management.
Have you ever lived on minimum wage? If not, do you think you could?
Do you think minimum wage should be higher, or is it enough to survive on?
Image from Sami73
Personally living on minimum wage anywhere in the U.S. at this time and day is impossible. Theirs literally no way anyone could live off $1,000 a month (if that) anywhere in the united states. Food alone for one person is on average $250 a week. Plus the fluctuating gas prices these days.
.-= Noah Rainey´s last blog ..Google the Monopoly? =-.
I also agree it’s possible to live on minimum wage; however I understand why people choose something else. The additional cost of childcare and healthcare can push ones budget and make minimum wage an unlikely salary. I’ve known people that can make more money on welfare benefits while staying at home with their children with free healthcare, education and housing opportunities. I’ve known people that work in the adult entertainment industry because the salary is much higher than minimum wage. I know some customer service positions offer $1.00 more than minimum wage, if you’re willing to take the abuse. There… Read more »
I think it’s possible, but it’s highly advisable to have some decent savings! My husband and I basically live off minimum wage x2 here in France. We’ve had a couple of little interruptions in our experiment in shoestring living here, but going by our budgets for the first few months at it, I’d say it’s doable. Your budget works I think, except that you really don’t have extra money for surprises like the car breaking down or . . . you know, surprises. So, I’d say that instead of a $300 disposable income, you’ll probably end up with more like… Read more »
Hey Noah,
You’re spending $36 a day on food?? What are you eating man?
Gas is also implying you have a car… which is a want, not a need.
I live at about $1,000 a month so I suppose I’m living an impossibility…?
.-= Ryan´s last blog ..Is Living on Minimum Wage Possible? =-.
Yea, I’m mostly bringing this up as a worse case scenario, because almost anyone could pick up a minimum wage job if they fall on hard times. It is possible, but it’s probably not a satisfying scenario by any means professionally. Children do add a lot more to the equation, yes, but a person also chooses whether or not to have a kid.
living on minimum wage is possible. Yet, i think it will be very difficult to save up to $300 out of $1000 monthly. I live on a minimum wage rate, but i think it’s easier for me because i’ve got no family with me.
Can I live on min. wage? Yes, but I’d be incredibly unhappy. Putting aside what society tells us, I love my car, I love my tv and hbo… call me spoiled if you’d like, but that’s not much to ask for in life. Whether I have $$ or not, I will always want a nice place, decent car. There are things in life we all just “want”. P.S. you didn’t compute things like health care plans into that fee or eating out twice a week, etc. 😉 .-= Moon Hussain´s last blog ..Are You Embarrassed Of Saying “Passive Income” Out… Read more »
hi, good point, it is possible to live on minimum wage yes, the only expenses mentioned are food, drink and place to sleep. but to get a minimum wage, you need to work; to go to work, you need transportation. I’m from Malta (EU) so i have no idea what transport costs in the US, however here in Malta public transport is unreliable and with certain jobs it is impossible to cope without own car. So with that $750 I would add approx $100 per month for car loan, and lets say another $80 for fuel. (myself I pay $120… Read more »
I would be curious to know more about a minimum wage lifestyle in Hawaii. I was stationed in Honolulu for 2 years and found it to be very expensive. Luckily I lived shipboard so my food and shelter was funded by the government. Though I felt sticker shock when I went shopping, dining or finding entertainment! Living on minimum wage in a rural Ohio town would be possible as housing is inexpensive. It’s also socially acceptable for an adult to live on minimum wage in small towns because there aren’t many high paying jobs to choose from. Do you think… Read more »
Yes, I spend $36 a day on food. I’m a fairly large man. A car is a need if your job is out of reach by bike (Which is a great majority of people).
.-= Noah Rainey´s last blog ..Google the Monopoly? =-.
i am currently living in east africa and i have in many cases lived comfortably below the minimum wage of 1dollar, the thing is that here life is very cheap but the lack of employment makes people poor. it is possible to live fairly comfortably with 60 dollars a month(tried and tested by yours sincerely) if you know where to live and eat
OOh, there’s going to be a Mrs.Planting Dollars soon! What? I’m an instigator…LOL! I do think it is possible to survive on minimum wage, but as you mentioned in several comments above, your expenses have to be extremely low and your definition of “living” has to be somewhat tailored. I know people “living” on minimum wage. Some have their priorities screwed so they are behind on a couple of bill payments, while others just stay at home. ALL. THE.TIME. My monthly budget is about $100 more than the extimated take home payment for those on minimum wage. I definitely could… Read more »
I notice that in your monthly bills breakdown, you didn’t mention the cost of a car (I’m all for biking everywhere) or utilities. I would also guess that making minimum wage at a job would probably mean that a person wouldn’t be eligible for health benefits, so that would have to budgeted in as well. It seems like living on minimum wage is possible, but difficult. I did it years ago (a long, long time ago) and was able to make it happen. However, I didn’t have to pay for my health insurance (I was still covered under my parents)… Read more »
Being a freelancer by trade (writing/acting/whatever), my income jumps up and down constantly, so I’ve learned to expect the bottom of the curve and then when I get a spike, I put it away in savings for a rainy day (i.e. a prolonged bottom). That said, I live comfortably on about $1,000 per month. I have a car, but it’s paid off (Idaho doesn’t have public transportation to speak of, and it’s all spread out so riding a bike doesn’t work so well), I eat pretty cheap, rent a room and don’t spend on anything I don’t absolutely need. For… Read more »
I think living on minimum wage is doable. We adapt to the situation that best serves our needs.
I recently quit my job as a nurse to stay at home and raise our newborn son. Now, we’re on one income. I feel a small pinch as we don’t eat out or shop as often. But, it’s a small price to pay to watch our son grow up.
Ryan–I’ve been here since July and I plan to stay . . . indefinitely. My husband is French and compromised for 6 years living with me in California, so we’re back in France now. I had to finally accept letting my career take a back-seater and my strategy in doing coming to France has been to figure out how to live on very little so that this time around, I can pick any career I want . . . or even a part time job, self-employment.
Hey Scott, Honolulu is the 25th most expensive city in the world I believe. It’s not cheap at all. Rent for me sharing with two other guys in a house is 660 a month, plus utilities. However, I can walk to the beach, climb diamond head, or engage in heaps of other FREE outdoor activities which are both good for my health and my wallet. If someone wanted to go out to eat every night and hit the clubs, then yes it’s expensive. The bus is cheap at $2.25 for two rides and you can walk/ride your bike most places.… Read more »
Agreed. I don’t think shooting for minimum wage is a great strategy… just trying to illustrate that it is possible as a worse case scenario.
How long have you been in france and how long do you plan on staying?
Lol, balding could be the cool new look for you! Would also save you $ on haircuts! I’m not sure what it’s like in malta, but there’s a minimum wage job available on almost every corner here in the states for anyone willing to sit at a gas station, retail outlet, or fast food restaurant. Unless one is way out in the country it should be walkable. I’ve never been to malta, is everything spaced out quite a bit? The kid issue is a toughie. Yes, this is based on a single persons lifestyle, it is a bit skewed because… Read more »
Yea, family is a biggie. Since you live on minimum do you plan on having kids at all before your income rises?
Yea, I didn’t compute those things in… was focusing strictly on needs, and what it takes to survive and focusing on if it was “possible.”
I wouldn’t consider spoiled at all and this post isn’t insinuating anything at all, just debating whether or not it’s possible.
Wow, $60 a month, how did you learn where to live and do you enjoy living there?
Guess it all depends on how low we’re willing to go… maybe I should write a post about doing the financial limbo??? 🙂
Haha, girls still have coodies 😉 I’m still trying to avoid anything with commitment… scary!
I didn’t realize your living expenses were that low, very nice!
Maybe I’m becoming a bit jaded since a lot of people around here live cheap and just do a lot of outdoor activities… surfing, hiking, sports, etc… which don’t cost much. Maybe not so possible in other areas?
Agreed, the more cushion the better 🙂
Just debating if it’s possible. I also did include a little for utilities, but the health insurance is a good point. Not sure which jobs offer it and which jobs don’t. I’ve had some in my earlier years while in school that I know offered it, but it all depends.
Yea, not a big fan of clothes shopping myself, although this is one of the best products to find super steals on!
I like the adaptable attitude!
I lived on around $1000 a month in Montreal, Canada for a few years and had a very full life…. Now in Egypt I am living on less and also having a full life too (obviously that is partially related to the difference in cost of living here)… Min wage living is very possible. I recently acquired a copy of The Tightwad Gazette and the way that lady saves money in every aspect of her life is phenomenal…
.-= Forest´s last blog ..FREE DOWNLOAD -Tribes: We Need You to Lead Us by Seth Godin =-.
From personal experience I can say that I have lived on as little as $500 a month including rent while in university and now I struggle living on a substantial monthly salary. It is knowing how to live within your means. On a minimum salary you can’t afford the latest gadgets and you are more likely to seek out promotions. While in university when my friends were getting their first iPods, I got a 64mb mp3 player free with a promotion offer (in 2004) and it did exactly what it needed to! Then in 2005 I got a free 512MB… Read more »
[…] previous post “Is living on minimum wage possible” brought quite a bit of mixed opinion. In fact a few strongly disagreed with me in the […]
I’m guessing life insurance isn’t included in this. If you aren’t prone to sickness or can live without an accident it may be possible. Also how big would your emergency fund be? Things happen in life…I’d be interested in how to prepare for “stuff” that happens living on minimum wage.
.-= Tess The Bold Life´s last blog ..My Dad and His Tool Shop =-.
I was able to live on minimum wage, when I was a college student. Working as a student lab assistent was a minimum wage job, and I did fine. At one point I had to live with 4 other roommates (eventually I found an apartment that cost $200 (this was over 10 years ago). I lifted weight and had a high protein diet, but I did fine. I just had to be more crafty… going to the bars when they had .25 beer night, walking everywhere, entertainment was hanging (and working out) with friends… I was living on minimum wage… Read more »
I have lived at minimum wage plenty of times. The last time was with two adults and two children. It can be done. We didn’t have a car, and public transportation wasn’t that good. People who say it can’t be done are thinking you HAVE to have a car, you HAVE TO have a big house, etc., etc. I actually look back on that period of my life fondly, and wish I could go back to those days when I had so much more time to do the things I wanted to do.
I totally agree Ryan that it is possible to live on minimum wage. I just think it depends on the mind-set. If someone has a problem sticking to a set budget, then they may find it often difficult to live on minimum wage because there’s no telling what they may splurge on. But nonetheless, I would agree that it is totally possible!
Jarrod
i would agree in some parts of the country it is possible but not everywhere. that being said how many people on minimum wage know how or would take the time to break the numbers down as you did? not many.
its all about budgeting and knowing your limits.
Luckily, I have, no, never had to live on minimum wage. I’m afraid that will become the norm soon. More and more people are getting educated, which means more people need jobs. I have doubts on whether the economy will ever be able to catch up to offer enough jobs for everyone (or pretty much everyone) to have one. I think a lot of them will end up being employed on minimum wage. I do think I could live on minimum wage if absolutely necessary. I’ve done some calculations about what I wouldn’t be able to give up and how… Read more »
Some people do have to eat more than others because of the way their body is made. However, it is possible to live without a car by moving close to work. The cutbacks, though, are enormous. Ryan talks some more on this subject: http://www.plantingdollars.com/personal-finance/needs-vs-wants/
Some people do need to spend more on food than others because of the way their body is made.
However, it is possible to live on minimum wage. For example, you can move closer to work and get rid of your car. The cutbacks, though, would be enormous; too great for most American’s these days. Ryan talks more about this subject: http://www.plantingdollars.com/personal-finance/needs-vs-wants/
Certainly it’s a smart idea to have a saving fund. Most financial experts recommend at least 6-8 months so people will have the time to find a job paying as well (or almost as well) as their previous job.
Unfortunately, most people already have too much expenses to save for an emergency fund; they can’t even pay their bills!
I’d guess that 1 child might cost $600 a month (a very rough estimate). Since the average person is married and has 2.5 kids, and I think most people would have to spend $1,000 on themselves each month, if both partners made minimum wage, it wouldn’t be enough.
It definitely seems like it would be a lot easier to live on minimum wage in your area than where I live, for example.
I live in a fairly big city. There is no surfing here, and activities such as hiking and sports cost money. However, I still could live at a minimum of $950, which is under the $1,068.
In a bigger city like New York City, it would be pretty much impossible because it’s so expensive there, and almost everything (even playing the park) costs money.
Most companies these day’s don’t offer health insurance benefits because it’s so costly (for some, $25,000 a year or even more).
Since the government is taking it over now, I think it will be a hundred or two dollars a month, and you have to buy it (it’s against the law not to). So that would bring $750 expenses up to around $900. Still plausible.
I think it’s totally possible to live on minimum wage. I’d have to stop paying back student loans and credit cards, but on minimum wage you can get hardship forbearance anyway. It can be as full or as empty a life as you want. But it’s enough to live inside (with roommates), pay (1/3rd) the utilities, and keep gas in the ($600 used) car. Heck, there’d even be some left over for beer. Best part about minimum wage jobs is that there are a lot of them available during non-daytime hours. You could work a basic fast food job in… Read more »
In California 30 hours a week is considered full time work for a lot of Retailers. Minimum Wage is 9.50. This is $1,140 a month. Take out taxes it is $1,000 a month. Take out the union dues and health care it is $960 a month. I live in a bad neighborhood and rent out a room with 3 roommates. My rent is $700. My utilities are $175 if you include cell phone. A Fast Pass to take the bus is $60. This comes to $935. This leaves me $25 dollars for a month worth of Food, toiletries, toilet paper… Read more »
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I think you’ve overestimated taxes.
I make a little bit more than minimum wage, live in a state with high (and practically regressive) state income taxes, have no children or additional deductions, and pay less than you’ve estimated for taxes. I think you didn’t take into account the standard deduction, so really only $10k of that $15k will be taxed.
Indeed it is. You can even get relatively wealthy on a minimum wage. I wrote a post about it
http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html
Of course, anyone sufficiently disciplined and driven to do this will probably make more than minimum wage in short order.
.-= Early Retirement Extreme´s last blog ..Guest post on Monevator about extreme retirement =-.
Living on the minimum wage is possible here in London, you just have to learn to adapt. Cut down on the booze, nights out, woman with expensive tastes and life becomes a hell of a lot cheaper…!
.-= William K Wallace´s last blog .. =-.
Money is important and its difficult to survive without it and i think instead of thinking to cut expenses one should think about earning more.
.-= Plant Money online´s last blog ..Spiritual ways to earn money online =-.
I agree that it is indeed possible to live on minimum wage. Despite what others may believe, it is not absolutely necessary (unless you have children) to have a large structure to live in. I have lived in Houses, Apartments, in a Garage, Campers, Hotels and Motels, on Ships, in a Semi-Truck, in a Van, and in a car with the passenger and rear seat removed made into a bed with storage back through the trunk. Incredibly, the car is by far the most comfortable and convenient of all. No joke. You can take showers at Truck Stops, Fitness Centers,… Read more »