Recently there has been a resurgence of the infamous, mockable sample budget that a couple of large companies put together to prove how a family can survive on a minimum wage budget. (If you don’t know what I am referring to, go search “ridiculous minimum wage budget spreadsheet” and you will find it.) This budget was originally published in 2013 when my husband and I were right out of college and living in a large city on two minimum wage salaries. I thought this may be a fun time to bring out our budget and show people what it really looks like to survive on minimum wage.
I have always been a meticulous budgeter. It’s something that I find completely necessary to live the lifestyle that I want on the income that my husband and I have. Even if our budget had more wiggle room in it, I would still keep an obsessive spreadsheet because I like to keep track of where our money goes. It’s how I set goals and prioritize.
Now I am digressing. Every family is different, and so the whole idea of a sample budget to show how people can live on minimum wage is a little absurd to begin with. I will say that “the” budget has some ridiculous flaws that we should address.
Let me break the whole thing down for you a little bit:
Net Income – $2060
This number (if we assume that it is a pre-tax number) means that at the federal minimum wage of $7.25, this person is working 71 hours per week. Say they lived in Chicago or another large city where minimum wage was $8.25 in 2013, then they are only working 62 hours per week. But…like I said, that’s pre-tax. When do the taxes come into play here?
Savings – $100
If you are working minimum wage, what are the chances that you actually put $100 into savings every month? Just saying.
Mortgage/Rent – $600
This one really depends on where you live and what your home is like. No comment here.
Car Payment – $150
Ok, I’ll buy that one.
Car/Home Insurance – $100
Sure, that’s not too crazy.
Health Insurance – $20
Whose premium is that low? Seriously!
Heating – $0
Ok, we can give them the benefit of the doubt and say that heat is included in your rent…
Cable/Phone – $100
This will depend on provider, area, etc., but ok, sure.
Electric – $90
Other – $100
So I suppose this includes – groceries, dining out, household supplies, toiletries, the basic staples to live?
Yeah, anyway – I think we all can agree that their budget is flawed.
So what does a budget look like when you actually live on two minimum wage incomes?
Well, let me start by painting a picture for you.
In October 2013 we were:
Right out of college
Living in Chicago
I worked for the minimum wage company in question
(I was a manager in training making $0.10 over minimum wage because I transfered stores and lost my seniority pay. Upon completing my hours of training I would be making $8.75 per hour.)
My husband worked for a large coffee chain
I was on my parents insurance
I worked a second and sometimes a third job with a theatre company
Our student loans were not yet due
We had one car that we bought used for $2500 – it was older than me.
Here is what our budget looked like:
We made it work on our minimum wage jobs. We always found a way, and we were even able to afford to go out with our friends on occasion – when we found the time after work. At this point, we were starting careers and looking for better jobs. I was a freelance stage manager and my husband was getting his EMT license. I ended up finding another restaurant to work for that paid me $11.50 per hour for a job that I liked much, much better.
Minimum wage worked for us as a stepping stone. We were young and just starting out. There is no way that we would have been able to have a family or own a home with the lifestyle that we have now on minimum wage. Without getting too political, I will say that minimum wage is a floor that acts like a ceiling. There are a lot of employers out there that are making a change for the better by setting their own wages, and recognizing that their employees are worth more than just the minimum amount they can legally pay. That is a great step in the right direction.
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