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Not long ago, Money Talks News posted an article about how to save $1,000 by summer. It was packed with good ideas, but as one commenter mentioned, the list seemed mostly geared toward those making middle-class incomes.
What about those of you squeaking by on minimum wage? Is there any hope for you to get money into savings? After all, working full time on the federal minimum wage brings in a whopping $15,080 a year before any taxes.
You wish you had money for a monthly latte, let alone a daily one. And a gym membership? Please.
So let’s assume you already have your budget down to bare bones: You’re reading this article on the library computer because there is no Internet at home, cable has been cut, and you have the thermostat set to slightly above freezing.
What else can you do? Here are 10 ideas worth considering:
1. Get out of debt
If you’re only making minimum wage, you can’t afford to be sending money to a car financing company, Visa, MasterCard or Discover.
Think about it this way: If you had no house payment, no car payment and no credit card payment, what’s left? The only bills you may need to pay would be utilities, taxes, insurance, gasoline for your car and food for yourself. In many areas of the country, you could do that on $15,000 a year.
Now, housing is a major problem, I know. On your income, it might be easier to sprout wings and fly to Paris than own a home without a mortgage. We’ll talk a little more about affordable housing options in a minute, but for everything else in your life, make living debt-free a priority.
2. Hoard gifts of money, tax refunds and other windfalls
To get out of debt and build up your savings, you need to make smart use of all those times you run into a little extra cash.
If you make minimum wage and have children, chances are you’re entitled to the Earned Income Tax Credit. That could mean you get thousands of dollars from Uncle Sam each year. What are you going to do with it?
You might be eyeing the ripped couch in the living room and thinking it would be nice to have it replaced. Or maybe you’d like to buy the kids new bikes or even take a trip somewhere.
Until you get on firm financial ground, resist the urge to spend those windfalls. Put a couple hundred in the bank as an emergency fund and ship the rest off to your creditors. If you’re debt-free (hooray!), bank at least half of it before you think about spending a cent.
Do the same with other unexpected money, whether it’s the $5 you find in the parking lot or the $50 your aunt puts in your birthday card.
3. Save your pennies
Literally. Start a change jar and put your coins into it every night. At the end of the month, roll up the coins and put them in a savings account.
You won’t retire rich off the money you collect, but you could end up with $10 or $20 a month to pad your savings account. That’s not much, but when you’re making $7.25 an hour, every little bit helps.