8 Ways to Manage Your Money If You Earn Minimum Wage
When you are earning minimum wage, it feels extremely hard to make ends meet, and an impossible task to save for the future. But, you don’t need to be some kind of financial analyst to effectively take care of your money. Instead, you can put to use a set of goals with achievable milestones. Here are 8 ways to manage your money if you earn the minimum wage.
1. Set Attainable Goals
The first approach you can take to your finances is to set attainable goals. This might feel like a hard task while you are pushing against today’s challenges, but it’s the best way to change your habits. Some common goals include getting out of credit card debt, growing an emergency fund or saving for a vacation. If your goal is pretty huge, feel free to break it down into more achievable chunks. It’s important to stay encouraged, and even if you’re able to meet small goals you’ll feel more motivated to continue.
2. Create a Flexible Budget
The next step is to build a budget that will allow you to complete your goals. Try out the 50/30/20 budget to see if it works for you.
- 50% of your income will be spent on housing and groceries.
- 30% is ‘fun money’ to be spent on entertainment and eating out etc.
- 20% will go into savings like retirement and pay off debts.
Follow this strategy and try to apply it to your wages. If you don’t have an exact grasp on your income because of tips or irregular hours, use an old tax return to work out an average. Create a budgeting sheet to work out your expenses, and don’t forget about things that don’t happen often like car maintenance.
Apply this formula to best fit your lifestyle, changing the amounts to fit your budget. For example, if 20% savings portion gets taken by debt, reduce the 30% of ‘fun money’ money so you can still contribute to your savings account.
