When the recession happened, most American consumers suddenly had to live on practically minimum wages or less. People who were used to earning a lot of money had to significantly lower their standard of living because they only had so much money coming in every month. It became even more of a problem because they had a lot of debts to pay off on top of the basic needs that their family requires to survive.
During tough economic times, being wise with your money is the best route to survival. Some of us think that a higher income is what we really need to make ends meet. That is true but there is more weight in learning how to manage your minimum wages than simply growing it.
Boost your low income with frugality
The key to live on minimum wages is to learn how to survive on it. Do not be too quick to increase your income. If you earn more money in the future, that is well and good. In fact, that is part of what we will suggest but you should stop thinking about earning more immediately. That is being proactive, yes, but sometimes, it makes more sense to be frugal because it teaches you to be wise about your money.
We have this mentality that as our incomes grow, our spending does to. There are do’s and don’ts after an increase in income and this is one of the don’ts. This is the wrong mindset because it puts us in danger of a debt cycle. We aim for a higher salary, spend to its limit or beyond it, borrow money to keep up with the new lifestyle and then we work harder to earn more money to pay it off. It goes on and on until we exhaust ourselves. If you look at the things around you, all you will really see are the “stuff” that does not really mean much to you now that you are in debt because of them.
In truth, you will get more out of your minimal salary by learning how to live a frugal lifestyle. Here are a few important concepts that you may want to understand about frugality.
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Frugality is all about spending money that you have wisely. You stretch your budget to the point of breaking but you never let it break.
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Frugality is about choosing how you will spend your money. It encourages you to invest your money on things that will last and bring you more value.
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Frugality gives you the resources to afford the important things in life. By eliminating the unnecessary expenses like eating out, annual vacations, big and expensive houses, luxury cars, and designer clothing, you have more money to save for your child’s college education. Or you have more money to put aside to buy your first home in cash. You are not really eliminating the house, the car and the clothes. You are just choosing only what is necessary and not what the affluent society wants you to possess.
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Frugality is making the conscious choice to live below your means. With minimum wages, you are going to struggle to make ends meet but it is possible. People have done it and all it really takes is a change of your mindset and a firm commitment to not overspend beyond your salary.
When you think about it, some people who are struggling with minimum wages make themselves poor. They live miserably because they are trying to live a life that they cannot afford. They try to ease the feeling of being miserable about their wages by buying stuff that they think will make them happy. In the end, these things end up as junk without contributing to their personal net worth.
4 ways you can survive on a small income
As you are learning how to be frugal with your minimum wages, here are four tips that will help you stretch your budget as far as it can go.
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Grab those freebies. There are so many free items. You just have to know how to get them. You can sign up with companies to get new products that you can test before they launch it in the market. Look for free healthcare or social service benefits that your local government offers.
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Share the expense whenever possible. Carpooling to work or getting a roommate will help you tone down the costs of both transportation and rent/mortgage. You should also bundle up services like Internet, cable and phone. These can really do wonders when it comes to trimming your household costs.
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Get rid of the unnecessary expenses. Focus on the basic necessities first like shelter, food and clothing. Identify what you really need and spend only on that. If you have extra, then you can think about going beyond these expenses or simply saving it.
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Look for a second source of income. Earning more is still part of what you have to do to survive your minimum wages. After all, you still want to improve your lifestyle. But now that you have concentrated on the frugal habits that will help you make wiser spending choices, you should be able to manage an increase in income. Look for freelancing jobs through outsourcing websites like Odesk.com or Guru.com. Or you can be creative and use your hobby to earn a bit of extra.
Surviving on minimum wages is tough – there is no joke about it. However, you need to focus on the habits that you need to develop instead of just trying to earn more. It can help, of course, but don’t be too quick to update your lifestyle as your income increases. Think before you spend. That is always the best way to go.