Fast food workers around the country are striking over the federal minimum wage—and it’s easy to understand why. The federal minimum wage is a paltry $7.25 an hour, and the most recent increase to this pay rate happened way back in 2009. Meanwhile, the price of everything else—like food, gas, and housing—has gone up considerably.
While President Barack Obama has proposed to raise the national minimum wage to $9.00 an hour and tie it to the rising cost of living, you shouldn’t hold your breath waiting for that to happen. If you, or someone you love, are one of the more than 130 million American workers earning minimum wage, here are four tips to survive financially.
Tip #1: Start a Side Hustle
Even if you put in 40 hours a week on your job, earning minimum wage means you’ll only make $14,500 a year, assuming two weeks of vacation.
That’s not a lot of cash to work with, so you should accept the fact that you’re likely going to need to pull in some extra funds to make ends meet.
The question is: Where can you earn that extra cash?
My advice: start a side hustle, something entrepreneurial that you can do in your spare time, either before or after your regular gig, or perhaps on the weekends.
For the fastest way to bring in additional income, don’t waste your time looking for a second job since the job market is so tight, and there’s no guarantee that you’d be able to quickly land that second job.
Better to simply think about creative ways to earn money on the side.
Your side hustle can be anything you’re good at and have time, expertise or the willingness to do: from babysitting or pet-sitting service to tutoring and consulting or even doing legitimate work-from-home businesses.
Tip #2: Seek Out Money-Saving Freebies
When you’re on the minimum wage pay scale, you simply can’t pay for everything.
Fortunately, you don’t have to; but you do have to know where you can turn for free resources and other no-cost benefits to which you may be entitled.
A case in point: can you slash a portion of your healthcare costs from your budget, by signing your children up for free healthcare offered in your state?
Or maybe, based on your low income, your kids can qualify for free lunch at school or other no-cost social services and public benefits.
Tip #3: Get Into the Habit of Sharing Costs
To stretch that $14,500 annual salary, get into the habit of splitting your recurring, monthly costs with others whenever possible.
For example: can you bring in a roommate to lower your own expenses for utilities, rent or mortgage? If you commute to work, are there any colleagues within striking distance with whom you could carpool, in order to save money on gas and transportation costs?
To make your limited dollars go further, you should even consider doing things like going in with relatives, friends, or neighbors to jointly buy food through local co-ops or by getting discount memberships at warehouse clubs.
Tip #4: Cut Out the “Extras”
No one has to tell you that if you’re living on a minimum wage salary, you shouldn’t be spending money on frivolous or expensive things.
But even if you’re not being wasteful in handling your finances, at a basic level, you also need to scrutinize your overall budget to cut out any and all “extras” if you’re finding it hard to cover your necessities, like food, clothing and shelter.
Examine your true spending and categorize everything into “needs” versus “wants.” Is cable TV really a “need” or can it be disconnected for now until you have better cash flow?
By looking at your budget with fresh eyes, and following the tips mentioned above, you can hopefully get by on minimum wage. Will it be pretty? No. Will it be fun? No.
But the four strategies above can at least help you survive what is undoubtedly an extremely difficult financial time.
In the meantime, let your elected officials know that a measly $7.25 an hour is not an acceptable federal minimum wage in today’s economy—no matter what part of the country you live. It’s well past time that politicians, employers and others acknowledged that U.S. workers who toil day in and day out have the right to earn a decent, livable wage.
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The Money Coach