How to Survive on $7.50 an Hour? A Reader Question

by Katy on May 2, 2009 · 26 comments

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I received this question from Jeanine in response to a posted link to a getrichslowly.org interview.

 

Every self help book on personal finance, spending, thriftiness blog, etc always touts spend less than you make. I 100% agree with that.

I would skip backwards blindfolded for someone to tell me HOW to spend less when you make $7.50 an hour, not on any government assistance and don’t qualify for Pell Grants to further your education. Sure you could take out a loan, but isn’t the whole purpose of this is to not make debt?

I have one general question: How can you save or invest what you don’t make?

Can someone start me off from being a junior in high school…and lead me from there. Because, in theory…at that age there should be no debt. It’s too late for me, but not for my daughters. I’ll take all the help I can get.

My granny once said she lived her life on the salary she made when she first started working. I saw with my own eyes that she did just that, but I honestly can’t see how that is possible these days., especially if you start off behind the curve.

 

I have survived and done well on $7.50 an hour, but it was in New York City in 1988 and before I had kids.  

How did I live well on a small income? I shared housing, brought my own lunches to work, didn’t shop recreationally and found inexpensive entertainment. Sound dour? Not at all! I hung out with friends and took advantage of all the free and almost free entertainment that is New York City. Most important though? I didn’t have a credit card, so when funds were low I simply stopped spending money.

I am lucky that I was later able to go to college without incurring a crushing amount of debt. (The University of New Mexico, where I got my nursing degree was $775 per semester.)  

What advice do you have for Jeanine? Are you surviving on $7.50 per hour? Please share your ideas and insights in the comments section below.

If you’re looking for more information about how countless Americans struggle to survive on minimum wage, check out Barbara Ehrenreich’s Nickel and Dimed: On (Not) Getting By in America.

Katy Wolk-Stanley

“Use it up, wear it out, make it do or do without.”

{ 24 comments… read them below or add one }

ggw_bach May 2, 2009 at 9:36 pm

that’s a great book by Barbara (Nickel and Dimed), read it about 5 years ago … made a huge impact on me. Those who live at that income level have it truly tough. Don’t envy them at all.

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lala2074 May 3, 2009 at 4:59 am

I was a student studying full time in Accountancy, and paying off a mortgage on my own, on my own apartment ( I was 18 years old) in 1982-1986.

How did I afford to buy the apartment? I did not have rich parents- I bought it all by myself. I had worked for 2 year part time while I was finishing High School and I save 95% of my wage as a “checkout chick” at the local supermarket”. This was my deposit.
Then I fronted up to the bank manager when I was 18 (much to the ridicule of my dad), and I had a home loan, all on my own! It was $15000 at the time, and I was only earning $100 per week, so it was very tight!

When I went to Uni, I had no support of my parents ( they thought going to Uni was a waste of money for a girl, I should get married and have babies) . So, I put myself through Uni. I lived on the student allowance at the time of $82 per week. I also tutored someone in High School for $18 per week. Total $100 Income.
I didn’t have a phone. I had a really old car, Datsun 1600 ,old , but in excellent mint condition. I caught the train to Uni. I cooked all my dinners at home and took my lunch to Uni. There were no mobile phones in those days. I used the public phone booth.
I did not buy anything new for 4 years. Basically, I did without, so that I could pay my Uni Fees, purchase my Law and Finance books ( really thick and really expensive, and the editions changed every year, so I couldn’t get by with second hand).

Even after all these years, my weekly budget is ingrained in my memory! I paid $40 on the mortgage each week. $20 on food, $20 on bills, $10 on car and $10 on entertainment. That was it.

I didn’t have a credit card, so when the money was gone, that was it until next week.

So, my point is, if you work out your priorities and are focussed, make the necessary sacrifices, anything is possible, even on the lowest of incomes.

I know, I have done it.

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blackgirlinmaine May 3, 2009 at 6:34 am

I would say its doable if one does not have any dependents. However if you have kids, as I did in the early 1990’s and was just making a hair above minimum wage, its difficult at best.

I relied on family, they assisted with food, clothes for my son. I also lived in Chicago at the time so while my rent may have been higher than had I lived in a more rural area. I was able to access free entertainment, cheap travel via the bus and train.

Now living in a rural state, I would say its easier to live on little in a more urban setting. In part because in places like NYC and Chicago, you can forgo car ownership which is costly. I learned this the hard way 7 years ago when I moved to Maine after a lifetime in a large city.

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Jinger May 3, 2009 at 6:39 am

I have a very small monthly retirement benefit plus part time work about 2 weeks each month. I live very simply, have only basic bills for food, gas, rent, utilities, car insurance, and cable/internet… nothing beyond that. I have past times that are free, yet rewarding and find many free events in my town to enjoy. Living large on little is a very good thing!

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Meg from FruWiki May 3, 2009 at 8:25 am

* Lots of overtime or a second or even third job
* Angel Food Ministries ($30 for a box of food that’ll feed you for a month, available to all regardless of income)
* Simple meals. Dried beans & rice as bases. Not a lot of meat. Not a lot of boxed, premade junk (even if it’s cheap you’ll pay for it in medical costs). Not a lot of fancy herbs unless you can grow/find them. Supplement with wild edibles like dandelion greens, available even in the city.
* Public transportation and a lot more walking/biking
* Plenty of roommates who also believe in freezing in winter and sweating in summer to keep utilities low
* Or, house sit for people on their dime
* Thrift stores, but no recreational shopping even there
* Free clinics for basic medical (and try not to cut costs at the expense of your health)
* Internet from the library as well as entertainment

If you live in the country, housing is cheaper but you give up public transportation and easy access to a lot of services. Be sure you are somewhere where you can garden and raise animals like chickens (at least for eggs) to offset transportation costs. When my mom was raising my siblings they ate a lot of domesticated rabbits and went fishing. I’ve known others who ate squirrel and possums, and yes, even fresh roadkill.

Also, get to know your neighbors and trade favors. They need help moving? Pitch in! And hopefully they’ll help you out when the time comes. Neighbors can be a great way to get starter plants, especially when it comes time to thin out their gardens. And if you have a car or will be getting one, be sure to find someone who knows how to fix them — and get an old car because it’ll not only be cheaper, it’ll actually be easier to fix than a new car.

And, please, if you do qualify for any government help, take it. I pay plenty of taxes and I want them going to someone who could really benefit.

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momentary de lurking May 3, 2009 at 6:07 pm

I second the comment about using whatever government assistance you qualify for. I’ve found several services that help me cut the costs of my prescriptions, and currently have a special low income membership card at my coop.

Try to do running start, or a similar program that allows jrs and srs in high school to take community college classes for both college credit and hs requirement fulfillment. The tuition is free to students, and its a great opportunity to figure out what you might want to major in on the state’s dime (where education should be).

I second the woman who suggested going for any and all free services available, especially medical services, but as a current college student, making about $55o a month, and without medical insurance I can tell you that most free clinics are overbooked, closing, and only take new patients with specific state health programs. It took me two months to find a doctor in the county where I am located who would take an uninsured patient for less then $300 for the initial intake visit, not even the visit for the thing I specifically needed. Free medical clinics cannot help you with continuing prescriptions from any doctor you might have seen under your parents either, and many college health centers are turning into the equivalence of high school nurses offices, in terms of services they can provide.

Free clinics aren’t always an option, but planned parenthood is. They have lots of programs for both contraceptive and non-contraceptive health care, and are probably the cheapest place for a poor student to get a physical or routine checkup (unless the clinic system in your area is good).

Do whatever you can to get a work-study award. Jobs are tight, jobs for students are even harder to come by because students have an automatic schedule-problem. Work-study jobs pay above minimum wage and guarantee you a paycheck on campus. A three month job search and 80+ resumes dropped off yielded nada until a work study award kicked in.

When considering a college think long and hard about the transportation costs of an urban vs rural school.

check out these dismal numbers about rent and minimum wage:

http://walkscore.com/rankings/walkers-paradises.php

its easy to say that living on a tight budget is easy/doable when you’re married and your job is more stable. As a college kid its nigh impossible.

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momentary de lurking May 3, 2009 at 6:07 pm
Cheapchick May 3, 2009 at 6:49 pm

Well, it is very hard, sometimes impossible. A few suggestions:

Use coupons(***only for necessities)
Consider signing up for Freebies (many sites)
Cook from scratch
Garden on the cheap if you have a patch
Trade clothes with others in your situation
Try out Freecycle
Always buy used (clothes/furniture/tools)
Frequent Garage Sales
Create an emergency fund no matter how tiny it is it might save your butt from a scrape one day
Definitely shared housing either with family or friends
Don’t own a car – use public transport
Use the library as a resource
Try to get a higher paying job (even in a bad economy)
See if you can supplement your income with secondary income (job/babysitting/surveys etc)

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BarbG May 3, 2009 at 7:54 pm

I think all the others have said it. There isn’t one thing but a whole lot of ideas. When I was making just above minimum wage I had two kids and was raising them on my own. I had bought a condo when I was with my ex and it was leaky so in order to have it fixed I had to get a second mortgage. I was so broke!
I just did everything imaginable to save money. Check out the many books available on living frugally (at the library of course!) The Internet has oodles of sites and groups too!

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rachel May 4, 2009 at 2:39 am

ive just started work in the uk on the minimum wage. part time after 5 years off with a baby as a lone parent. i was on government benefit during this time – but i worked for 25 years previously paying taxes etc so feel no shame at having to rely on help with my daughter needing me at home.

My job is in school so means i dont have to look for childcare luckily – and im home for the holidays. the wages are averaged out for the year so i get paid during vacation time but does make it less each week. here in the uk our low wages are supplemented by tax credits which bring it up to a liveable income though still needs very careful budgeting.

I have always made a monthly list of monies coming in, bills going out – how much and the dates and a running balance of how much is available to me after basic needs like food, water company costs, heating, rent etc. when i have any left over some goes into savings for a rainy day, and some maybe for a treat – bus to the beach on a good weekend or something similar.

i dont have tv , just a dvd and video player and that stops the adverts aimed at my child so she doesnt keep bothering me for stuff, although i do try and treat her occasionally – trip to the cinema or something.
we have friends round often for pot luck suppers, walks to fly kites, go to any open air local free festivals etc, go swimming and have a pretty fun time without having to spend much. In fact, having this income coming in now is great – im getting a little more than i had on benefits and still able to keep my frugal head on my shoulders.

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Kris May 4, 2009 at 3:08 am

Ehrenreich’s book was right on, tho I wondered when I read it what planet she had lived on earlier. Parenting on such a low income is very hard. Engaging the children to be aware of costs and to earn what they can is one way; another is to go ahead and invest in school with a sharp eye on jobs the other side of graduation. Don’t major in history like I did and then fall off a cliff when there aren’t any jobs. Consider military service, with benefits. As many others have said, I have been earning barely minimum wage all my adult life. I sew my clothes and my family’s, knit, and crochet. I cook from scratch. I use free library and public resources. I am active in my church, a valuable community that teaches better values than commercial ones. Tune out commercial advertising as much as possible; they can make you feel poor even though you actually can get by. Stretch yourself to give to others–service, companionship, homemade food–and learn from those who have been through bad times. The Depression was a great teacher and many learned from it. Try to focus on what you have, not what you don’t have, and you will help your children learn what is a happy life. I also think urban living in the U.S. is cheaper than rural, because of transportation and other costs, and there are more and better jobs than in most rural areas.

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Jackie May 4, 2009 at 5:38 am

This is uncanny. Just last week I was contemplating how people can make it on minimum wage. I am 60 and would like to retire while I still have decent health. If I retire at 65, I will receive $749/mo for retirement from my workplace. Not much. I’ve decided to see if I can do so by #1. tracking everything I spend and if I spend more than $749/mo see what I can cut out. I do have a 403(b) and several other savings vessels, but would like to not touch those until needed. I’m already pretty frugal, but I do spend when not necessary. I’d really like to see “how low I can go.”

Haven’t had a chance to read all comments, but will do so when I’m not at work 🙂

“Waste not, want not”

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mcara May 4, 2009 at 5:47 am

My sister knew a girl who put herself through college making lace. Buyers were willing to pay her top dollar she was that good. It might be worth your while to see about a little side biz. Maybe making baby quilts that can be sold at flea makets or yard sales or on ebay. Maybe there’s someone in your area who would love to teach you to knit, and you could make baby caps and such. Another thing might be to buy old furniture (chairs & small tables) fix them up and resell. It’s not too late for you.

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Kristin @ klingtocash May 4, 2009 at 6:35 am

I am not a fan of debt, but I do believe that students loans are an investment in your future. If you attend two years of community college and two years at a state school, you can get out of college with less than $15,000 in student loan debt. While progressing through college, you can get internships. Some of these internships pay very well. This can help reduce your need for student loans. If you can go from making $7.50 an hour to $20 an hour by getting a four year degree, you could increase your income by $26,000 a year. If you remain frugal, you could pay off those student loans in less than two years, while building your financial security.

Education is an investment in your future and should not be dismissed because student loans are your only option. This is like cutting off your nose to spite your face.

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Kathy May 4, 2009 at 7:15 am

I agree with Kristin: education is a GREAT investment! Skipping college as a way to avoid education debt is equivalent to signing up for minimum wage for the rest of your life. Starting out at a Community College and then transferring into a state college is a very reasonable way to manage college costs.

Ideas to picking up extra money here and there: house-sitting/pet-sitting (develop a reputation for being super-responsible, and your name will spread like wild-fire from one satisfied customer to lots of others), selling on eBay, being a banquet waiter (typically quite decent $ for just a couple of hours time), tutoring, cashing in on a hobby (giving lessons, writing ebooks, selling on etsy)…

Good luck!

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Bethany May 4, 2009 at 9:41 am

There are also ways to get a well-paying job in only a couple years – depending on the field you are willing to enter. For example, there are programs in nursing, radiology, nuclear medicine, drafting, HVAC, construction, welding, etc. etc. Many of these jobs only require an associate degree to enter and do pay pretty well – especially considering the up-front investment is low. This would be a better course for the cash-strapped than, say, a four-year degree in a liberal arts major that does not feed you into a well-paying profession.

I have an bachelor’s degree in English, which I am very thankful for. But more than once I have looked at my cousin who makes twice as much with a two-year degree in nuclear medicine and think hm, maybe I should have done *that.*

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Jeanine May 4, 2009 at 10:27 am

Hello Everyone!

I haven’t read the first comment, or even the blog for that matter, because I am working the drive-thru. And it’s the first of the month…so I have about -0- much time between customers.

Thanks Katy for posting my response. I was totally floored when I saw it.

Thanks to everyone who commented. I’ll read them over tonight.

:*))

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Margot May 4, 2009 at 10:46 am

Focus on the income side of the equation, and don’t get in a mindset where you assume you’ll always make $7.50 an hour. That’s not acceptable. Get a second job. Work like a crazy person – at least temporarily to give yourself a financial cushion. Find a range of other creative ways to make money on the side – babysitting (easy to do if you’re home anyway!), pet sitting, watching people’s houses when they are on vacation, cleaning homes in the neighborhood, selling things on ebay. There are a million little, creative ways to bring in more income.

Second, start thinking long-term about your career and how to earn more than $7.50 in your primary job. Do what it takes to get raises or get a new job. Self-educate with free books at the library and other free community resources.

Finally, cut out all unnecessary spending with the methods listed above and on this blog.

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Roxanne May 4, 2009 at 1:05 pm

Get extra jobs. Not only do they create immediate income but they expand your horizons. I was asked by my cousin when I was 22 just exactly how many jobs I had had. I made the count and it was over 80. Some were only for 4 hours but I got paid.

Now I am twice that age and there isn’t much I haven’t done and people call me to work for them.

If at all possible have self-employed income and make everything you do tax deductible. All my friends are clients so my trips to see them are a right offs.

Shop at Big Lots for canned and processed food. I bought 6 months worth of decaf coffee for $15.00 (decaf is my one vise). Don’t smoke, drug or drink. Costs to much.

And if you do eventually buy a house make it an old duplex in a cheap urban area. Let your tenant pay most of your mortgage. I contribute $100.00 to my mortgage and do most of the repairs myself.

And most important read blogs like this. 🙂

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Angela May 5, 2009 at 10:15 am

I’m sorry I’m coming to this one so late, because I actually wanted to answer Jeanine when she asked that question.

She says it may be too late for her, but not for her daughters. I remember when I was working for very little money out of graduate school. I owed for student loans, and I didn’t make enough to cover my basic expenses. This was even though I was living on budgets like LaLa’s- $20 per week for food etc. I even remember one time telling a friend I had $30 to last the next ten days and he said “$30! That’s miscellaneous money!”

It would make me feel so bad about myself when people would tell me I needed to spend less than I earned, etc. I didn’t earn enough, pure and simple. It wasn’t that I was bad at managing my money. As soon as I learned a skill and got into a union, my wages literally tripled overnight. Using all the frugal lessons I’d learned, I was able to immediately start saving half of what I earned.

So my answer to Jeanine is that you can definitely learn frugal habits. But the best thing for your daughters is to make sure they get an education and/or learn a skill that will earn enough money so they have choices in life. Like Katy- she has the choice to work less because she earns a good salary. That’s the position I’m in and I’m so thankful for it.

Sorry that was so wordy.

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Camilla May 6, 2009 at 12:39 am

I think Scratch Beginnings: Me, $25, and the Search for the American Dream by Adam W. Shepard is a very good book that illustrates that it is possible to survive AND to thrive on low incomes. However it also stresses the importance of smart spending of the money you earn, a lesson some of the books subjects repeatedly fail to learn, keeping them in poverty. Those who have learned to spend their money wisely however, succeeds.

Trent at The simple dollar has a great review of this book. http://www.thesimpledollar.com/2009/01/11/review-scratch-beginnings/

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Wendy May 6, 2009 at 7:14 am

Angela, I was happy to see you put the truth out there. You wrote, “It would make me feel so bad about myself when people would tell me I needed to spend less than I earned, etc. I didn’t earn enough, pure and simple. It wasn’t that I was bad at managing my money.”

“Nickeled and Dimed” addresses this issue; simply, we need a “living wage” in America, no one that works full-time (40+ hours per week) in the “richest country” should have to live in poverty.

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Ruth May 6, 2009 at 9:29 am

We do need a living wage and I enjoyed “Nickel and Dimed”–however, the author had no experience with low-cost living. I lived quite happily on $425 a month for years. My advice, particularly to a young person:
1. Don’t have children if you can’t afford them. Planned Parenthood has low-cost health care and birth control.
2. Live with roommates. Preferably several.
3. Don’t have a car. There are lots of cities and towns you can get around without a car. Cars cost way more than food.
4. Don’t buy anything new, etc.
5. As people have said, take advantage of all the low-income programs. There are low-cost medical and dental clinics and even low-cost health insurance in many states.

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Imee May 6, 2009 at 8:30 pm

There’s plenty of ways to save money. Lifestyle change is one, another would be to take advantage of several government programs you may qualify for. A tip my sister taught me was to create “fund boxes” (i.e. a box to put in my savings, another for food, etc). and use the money only for its designated purpose.

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