How to save money on minimum wage

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How to save money on minimum wage

In the United States, the federal minimum wage is set at $7.25 per hour. If you think that’s not a lot of money, you’re right – working 40 hours a week, 52 weeks per year, that’s an annual income of just $15,080 in total, excluding your tax burden. 

Unfortunately, that barely covers rent in most places, let alone enough left over to save. But with a little determination and some creativity, you can learn how to save money on minimum wage.  

How much of my income should I save?

Typically, experts suggest saving at least 20% of your income – but if you’re living on minimum wage, that’s just not doable. Instead, save as much as you can afford while working to better your financial future. Even $5 per week comes out to $260 per year!  

Can I live off minimum wage and save money?

In most places, minimum wage doesn’t match up to the cost of living. But if you’re intentional in your budgeting and spending, you can find ways to:

  • Slash your bills
  • Increase your income
  • And free up some cash flow  

Where should I keep my savings?

When you earn minimum wage, stretching your dollars is more important than ever. That’s especially true if you’re living on one income. 

To make your savings go further, start by opening a high-yield savings, money market, or investment account. Any of these options can generate a little interest on the money you’ve already saved. 

13 ways to save money on minimum wage

Saving money on minimum wage can be a challenge – but it’s not impossible. Try these tips for saving money to get you started. 

Create a budget

When you’re first learning how to save money with low income, start by tracking your monthly cash flow. Identify where your money goes, any purchases you don’t need to make, and what funds you have left over. 

Tackle debt

High-interest debt eats away at your hard-earned paycheck and can lead to harmful debt cycles. Throwing extra money at your debts may tighten your budget now – but you’ll free up your income down the line. 

Reduce your expenses

After you know where your money is going, it’s time to figure out where to cut expenses, such as:

  • Reducing your subscriptions
  • Switching phone plans
  • Refinancing your home or car 
  • Bringing in a roommate

Get a side hustle

Just because your job pays minimum wage doesn’t mean that has to be your only source of income. Consider increasing your monthly take-home by getting a side hustle or starting a business like these:

  • Thrifting items to sell online
  • Providing pet or childcare
  • Driving rideshare 
  • Delivering food or groceries

Automate your savings

When you’re living paycheck to paycheck, getting into a savings habit may not happen overnight. But you can make the process easier by automating your savings online. Every dollar you move is a dollar you won’t spend immediately!  

Use budgeting apps

Budgeting apps can help you figure out how to save money on minimum wage based on your expenses. Visualizing and tracking your money movements is a great way to find more places to save. 

Apply for a savings match program

Savings match programs are offered by government, bank, employer, and non-profit organizations to match savings for lower-income individuals. Depending on the program, you can earn up to $3 for every dollar you tuck away! 

Earn cash back

One of the best tips for saving money is to make more money wherever you can. With cashback apps and banking reward programs, you can earn money just for shopping as usual. And check your credit cards rewards programs to see if you can earn points, cash, or other perks on your spending habits. 

Split expenses

Splitting expenses wherever possible is a great way to save in your daily life. For instance, you might:

  • Commute to work with a friend
  • Split rent with a roommate
  • Or join a friends and family phone plan

Any bill you don’t have to pay in full and alone is a chance to free up a little more cash.  

Hit up thrift stores

Thrift stores sometimes get a bad rap – but they’re a great way to get quality items and hidden gems for cheap. Thrifting clothes, furniture, kitchen utensils, and other household items can save tons off the original price. 

Ditch your car

If you live in an area where public transportation, biking, or carpooling makes sense, then consider ditching your car. You’ll save money on insurance, gas, repairs, and taxes. Plus, if you sell your vehicle, you can use the profit to pay off high-interest debt or jumpstart your savings!

Take advantage of free money

Many low-income families and individuals living on one income may qualify for the Earned Income Tax Credit. If you qualify, you can reduce your tax burden and possibly even increase your refund. 

The IRS lists the qualification requirements here, but generally, you must:

  • Earn less than $57,414 per year.
  • Have investment income under $10,000.
  • Have a valid Social Security number.
  • Be a U.S. citizen or resident alien.
  • Not file tax forms related to earning foreign income.

Avoid eating out

Eating out is much more expensive per meal than cooking for yourself. Plus, with a little practice, you can start making meals that are healthier and tastier than take-out. 

Knowing how to save money on minimum wage is half the battle

Living on minimum wage doesn’t mean that you can’t meet your savings goals – it just takes some creativity and sacrifice. But by committing to your goals and learning how to save money on minimum wage, you’re already one step closer to financial freedom.


Can you live on minimum wage?

It’s possible to live on minimum wage, but it’s not always easy. Most minimum wage earners have to get creative and slash bills to make ends meet.

How can I save money with low income?

The best way is to start small and automate your savings. You can also get a second job to increase your income and put your tax refund into savings every year.

How can I save money if I live paycheck to paycheck?

Start by setting goals, saving pennies or dollars at a time, and increasing your income (or slashing bills) wherever possible. 

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