How to Get Ahead on Minimum Wage

This author traveled through Central America and saved for retirement on just $15,000 last year.


Most people think you can’t live on minimum wage, much less get ahead. The current minimum wage in the U.S. amounts to a little over $15,000 a year before taxes. While it may seem impossible to live on such a small amount, it can be done. Here are some steps to take to stretch a mimimum wage salary.

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The first and most important thing you need to do is to find cheap housing. If you live in an expensive area, you need to move. If you are only making minimum wage and you want to get ahead, you can’t afford the luxury of living in a high-cost area. There are many places in the U.S. where you can find decent housing for less than $500 a month, sometimes much less than that. If you are willing to live with a roommate or two, that will expand your options of places to live.

The next big expense to cut is transportation. When choosing your housing, you need to find a place that is within walking distance of your job or that has cheap public transportation. Not having a car will save you lots of money. If you don’t have a car, your idea of what is within walking distance will change. A bicycle is another cheap form of transportation you may want to consider. A side benefit to not having a car is that you will get exercise from walking or biking.

Food is probably the next expense you will need to cut. You will not be able to afford to eat out very often. If you cook all your meals at home, you will be able to eat healthy food for much less than eating out.

You will not likely be spending much on entertainment. The library is a great source of free entertainment. You will probably discover many other sources of free entertainment in your community if you keep your eyes open for them. Hiking and enjoying the outdoors is a cheap entertainment option. If you are going to have TV, you should just watch broadcast TV. It is difficult to justify the expenses of cable when you are making minimum wage.

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You should also save money from every paycheck. Once you have an emergency fund established, then you should put money in a retirement account. This will allow you to qualify for a tax credit of up to $1,000.

Although you can get ahead on minimum wage, you ultimately will want to increase your income. If you combine the frugal spending habits you develop while living on minimum wage with a healthy income, then you can get ahead much faster.

For those who believe this can’t be done, consider this. Last year I made a little over $15,000 and yet was able to visit every country in Central America, go on a two-week backpacking trip, buy a car, and still put a little money into my retirement account. If it were not for the travel expenses and buying the car, I would have been able to max out my IRA. Getting ahead on minimum wage can be done.

Andy Hough writes about frugality and living well on a small income at