An important question that is likely to cross the minds of many people, particularly some who are struggling with financial issues. is if ‘It is possible to live on minimum wage in this day and age?’
Since many individuals may either be looking for work or currently working at jobs that pay bare minimum pay wages – there may be many cases where they have difficulty making their payments, saving money, and ultimately meeting their financial demands. Also, it’s clear that a number of Canadians continue to take on more debt so minimum wage isn’t enough to pay these debts. That being said, however, – a second question – ’is there another group of people that do seem to meet their financial demands and live relatively comfortably with the limited amount of income they earn?
With all of the many growing expenses these days, such as housing costs, raising children, vehicle and transportation costs, etc. – this can make it harder and harder for individuals to live on minimum wage. So just how do those that accomplish this goal to make it work?
One possible answer to this question may be that while some individuals are trying to support an entire family, others may only need to pay for themselves.- The reality of it is that there will be differences across each situation that will impact their ability to live on minimum wages. Furthermore, there are also some financial behaviours and characteristics that may also enable individuals and support themselves as well as their families with lower levels of income.
Effective Financial Behaviours:
Exercising strong Budgeting Skills
Being able to design a personalized budget that meets your/your family’s needs and is also realistic for your current financial circumstances is key to being able to make sure your money is going where it needs to go, but also staying in your wallet for when you need it. Translation . . . not overspending. The last thing you want to do is devise a budget that is unrealistic and one that you can not possibility stick to. Instead, make sure it fits with what you can afford and finding a proper balance between your spending and your saving.
With minimum wage, however you may not be able to save very much each month – although you do have to make sure your money doesn’t run out before all of your monthly bills have been met. If there are expenses you can cut back – or cancel altogether, this may allow for a little extra wiggle room for your bills from month to month. Again, especially on minimum wage income you need to ensure you are budgeting as efficiently as possible – a quality that is likely present in skill set of the most frugal of individuals.
Knowing the Difference Between Needs versus Wants
One aspect of financial management that helps individuals meet their payment needs based on a minimal income wage is to differentiate between needs versus wants. Often times, with any wage level it is overspending and paying for items and services that are in fact unnecessary that will ruin your ongoing financial success. While it is nice to occasionally buy things just for pleasure and just for the sake of haven’t something new and exciting – with low income cases – if this behaviour occurs too often, then living on minimum wage for sure is not likely to be possible.
Subsequently, with children and family members to support there will definitely be expenses that are required, however with that being said there may be certain ‘luxury’ items that you can go without and still manage your finances. Of course, again it does depend on the specifics of the family dynamic – and the nature of the finances that will make living on minimum wages in this day and age a possibility or not.
Being an Efficient Shopper
On top of shopping based on a needs over wants perspective, there are also other factors that can be utilized to help individuals as they try to live based on their minimal waged income. If you want to be an efficient shopper, then shopping when sales and discounts are available can certainly be an advantage. In addition to these reduced sale prices, buying generic brand products can also allow shoppers to benefit from lower prices and as a result make their money last a bit longer.
If you are currently taking home a minimum waged pay cheque, then displaying shopping behaviours that are organized can make a big difference. Secondly, having patience can also help to avoid impulse-purchases that may also lead to paying for things at much higher costs that what is necessary. Overall, being able to wait it out (if you can) and watch for sales can be a good method of saving some money on a daily basis. Shoppers may also be able to shop second hand retail locations for a variety of their purchases – and this can help them save quite a bit, while still obtaining good quality items. The more frugal you can be as a shopper, the better chance you have to live more effectively on a minimum wage salary.
The Challenges of Minimum Wages
On the other hand there can also be certain areas where earning minimum wages may hinder an individual’s ability to support themselves and/or their family. Some of them may include:
• Unexpected Expenses: encountering expenses that are unplanned for can unfortunately make it challenging to make a lower income wage last from month to month. While some months may be ok for you- for others it may prove to be more difficult to stick to your budget. One bad month can also set minimum income earners back for the next few months – making it extremely difficult to meet their ongoing financial demands.
• Single Income Family: while dual income families may also have a lot of challenges to face each month with lower earnings, single income families may also experience this to an even greater extent. In certain cases, it also appears that a common characteristic of minimum wage earning families is that many of those ‘households’ may be single-parent or single-income families. In the end,this may prove to be an added level of difficulty placed upon those who’s take home pay is based on a minimum wage.
All in all, the two categories above may actually paint a picture that can be extremely different for all concerned. While in some cases, it may be possible to live on minimum wages – in other cases, this may not be possible. For those individuals who do not encounter unexpected expenses, in combination with strong financial behaviours that encourage positive financial situations – they might just be able to stick to their budgets and stay on track from month to month. Single income families, however may also struggle more than dual-income households, since families with minimum waged incomes still may have issues obtaining financial stability.
The bottom line, I would have to conclude here is that while it may be possible, it can be difficult to achieve even in the most ideal of situations. With the growing costs associated with raising children and purchasing a home, and so on – minimum wages might just not cut it in the lives of many families and individuals across Canada – one thing is for sure – it will require a delicate balancing act and a strong commitment to managing your finances that will make it possible to live based on a minimum wage income in today’s economy.