Budget Living: Living On Minimum Wage

Budget Living: Living On Minimum Wage

Tess Wilson
Jul 25, 2014

After four years at Apartment Therapy, I'm still surprised by the comments along the lines of the following: "I just don't understand how as an adult with a job, one can be so specific as to what they want. Everything I want, I have already bought for myself." I thought we might take a moment to explore what home life is for the 1.6 million of our fellow citizens making $7.25/hour...

These are my best estimates for how monthly income and costs would break down for someone on minimum wage. There are a million variables and complications at play here, obviously, but wherever possible I used the lowest cost option available.

  • Federal Minimum Wage: $7.25/hour
  • # of states/territories where minimum wage is =/< the federal: 26
  • $7.25/hour x 40hours/week = $290/week before income taxes
  • $290/week x 52weeks/year = $15,080/year before income taxes
  • Annual Income After Taxes: approximately $13,572 (very approximately!)
  • Funds Available Per Month: $1,131 (approximately)
  • Electricity: $73+/month- at least in Idaho, the cheapest state for electricity according to NPR
  • Rent: $700+/month- Louisville, KY is ranked as one of the Top 10 Cheapest Cities To Rent An Apartment, and the median rent there is $727/month
  • Water: $20/month- from what I gather, most households pay $10-30/month
  • Health Insurance: In many states, this level of income qualifies citizens for Medicaid- but not all. Unfortunately, this complicates the calculation process, but by bumping up the income to $16,000, I was able to come up with annual premium costs of $539/year, or $44/month
  • Public Transportation: A monthly pass is $64 in Milwaukee, $80 in Dallas, $60 in Indianapolis (all in Federal Minimum Wage states), so lets say $70/month

So, with just the basics of shelter, electricity, water, health insurance, and transportation, we're already up to $907/month. That leaves $224 for food, gas/propane heat (an enormous cost in cold climates), cleaning products, laundry, boring essentials (toilet paper, period accessories, etc), phone and/or internet, medications not covered by insurance, work clothes and shoes, retirement, student loans, credit card debt, and all the other countless costs that add up so quickly.

But these numbers are very approximate, and basically theoretical - I'd love to hear from those of you actually living on minimum wage. How do you make it work - or doesn't it? What household items that many take for granted have you had to give up? Have you been able to find dirt-cheap housing, and if so, what is your place like? Can you afford heat in the winter and a fan in the summer? How do you keep your household running, and is it sustainable?

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