17 Tips for Living on Minimum Wage

There’s no doubt that trying to live on minimum wage is no easy feat. This is especially the case with the cost of living constantly increasing while the federal minimum wage ($7.25 per hour) hasn’t budged since 2009. In fact, the federal minimum wage is worth nearly 30% less than it was 17 years ago and about 40% less than its peak value in 1968.

However, even if you are making minimum wage, don’t despair. How to survive on minimum wage can be difficult, but it’s not impossible. The key is to keep track of your spending, cut costs where you can, and create — and stick to —a realistic monthly budget.

If you’re living on minimum wage, learn how you can stretch your dollars and even manage to sock some money away for that rainy day fund.

What Is Considered Minimum Wage?

The federal minimum wage, created by Congress in 1938 under the Fair Labor Standards Act (FLSA), establishes a base hourly rate at which employers are required to pay their employees. The current federal minimum wage is $7.25 and, as noted earlier, has remained the same since 2009.

Many states, cities, and municipalities have realized that the federal minimum wage is extremely low. They have therefore passed their own minimum wage laws, offering a higher amount that generally ranges from about $10-$16 an hour. In addition, many companies (such as Amazon, Costco, Target, and Walgreens) have enacted their own higher minimum wage, eclipsing the federal minimum wage.

In situations where an employee is subject to both federal and state minimum wage laws, the worker is entitled to the higher of the two minimum wages. For instance, Georgia’s basic minimum wage is $5.15 per hour, but since the federal rate is higher, employers must pay the federal wage of $7.25.

What about tipped employees, such as waitstaff? According to the U.S. Department of Labor, employers may pay a tipped employee no less than $2.13 an hour in direct wages. There is one condition, though. If that amount and the employee’s tips don’t add up to at least the federal minimum wage, the employer must make up the difference. In a number of states, the direct wage for tipped employees is higher than $2.13 per hour to help ensure a livable wage. It’s worth noting that when an employee is subject to both the federal and state wage laws, they are also entitled to the provisions providing the greater benefit.

Is Minimum Wage Livable?

The term living wage refers to the amount of earnings a person or a family needs to cover their basic expenses. These can include groceries, utility bills, housing, health care, transportation, and childcare. The goal of paying employees a livable wage is to prevent people from falling into poverty and to allow them to have a decent, satisfactory standard of living.

Unfortunately, the cost of living in the U.S. has risen over the decades, especially during recent inflationary times, and the minimum wage has failed to keep up with the prices of goods and services. A full-time worker who earns the federal minimum wage has an income of $15,080 a year, which is below the 2026 federal poverty line for an individual ($15,960), according to the U.S. Department of Health and Human Services. If that worker is a single parent with one child, they’re significantly below the poverty line, which is $21,640 for a family of two. The bottom line is that for most people, earning $7.25 an hour doesn’t cut it in terms of providing a living wage. Even if you live in a state with a higher minimum wage, you may still struggle to maintain a modest standard of living.

17 Tips for Living on Minimum Wage

So, how to live on minimum wage? Here are 17 ways that can make it easier to survive on a minimum wage salary and even set aside some savings.

1. Evaluate Your Overall Spending

A first step to getting a hold on your finances is to know how much you’re bringing in per month versus how much you’re spending. One way to do this is to record all of your expenses. Begin tracking your spending for 30 days. Include everything, even the change you put in the tip jar at a coffee shop.

Doing so will give you an overview of exactly where your money is going and help you determine where you may need to make some cuts. Seeing a spending pattern may also pinpoint the causes of overspending, such as not being able to say no to a restaurant invite when you really can’t afford it.

2. Create and Stick to a Budget

Having a budget provides you with a structure so you can organize your finances and live better within your means. When you’re not bringing home a lot of bacon, it’s vital to make sure you know exactly where your money is being spent each month. A line item budget can help you track your spending in various categories and make adjustments as needed.

One common budgeting method to consider is the 50/30/20 rule. With this, you allocate 50% of your income to your needs (essentials), 30% for wants (nonessentials), and the remaining 20% toward savings. This guideline can help you manage your money better.

Recommended: 50/30/20 Budget Calculator

3. Put Some Money Toward Savings

The thought of saving when you’re barely scraping by can seem impossible. But if you’re making minimum wage, even putting $5, $10, or $20 a paycheck toward savings can add up over time. You might even set up an automatic transfer from your checking account to a savings account a day or two after every payday. It’s as effortless as automatic bill payments and can help you build up a nest egg.

Doing so can also get you in the habit of saving and potentially improving your mental health. One University of Arizona study found that people who save money report less psychological distress and experience increased financial satisfaction.

4. Look Into Government Benefits

Another “how to survive on minimum wage” tip: Millions of low-wage earners in the U.S. qualify for federal and state government assistance benefits. This aid can help lower costs of food, health care, housing, and more for those surviving on minimum wage.

Some of the most popular programs include Medicaid, the Children’s Health Insurance Program (CHIP), the Supplemental Nutrition Assistance Program (SNAP), and the Temporary Assistance for Needy Families (TANF). To see what benefits you might qualify for, visit benefits.gov.

5. Save on Food

Minimizing dining out and takeout will naturally lower your food bill, but here are some other ideas:

•   People and families living on minimum wage can qualify for SNAP (formerly called the Food Stamp Program) to help offset grocery costs.

•   Consider shopping at less expensive supermarkets, using coupons, buying the store or generic brand, and ask whether the store has a customer club card so you can get additional discounts.

•   Buying in bulk and stocking up on frozen foods and pantry staples such as bread, milk, eggs, peanut butter, pasta, beans, rice, tuna, and canned soups can help when money is particularly tight.

•   Food banks or pantries can be another resource. You can search for one in your area at FeedingAmerica.org.

6. Find Additional Ways to Increase Your Income

If you are struggling to make ends meet, you might also think about how you could bring in more income.

•   This may be the time to look for a higher-paying job or simply ask your boss for a raise.

•   Investigate getting a side hustle on your off hours, such as driving for Uber or Lyft or delivering food for DoorDash, GrubHub, or Instacart. You could also consider house cleaning, babysitting, dog walking, or pet sitting for extra money.

•   Have a marketable craft or hobby? Try selling your creations on Etsy or at a craft fair.

•   If you have unwanted stuff that others might want, put it up for sale on Facebook Marketplace, eBay, or your community’s neighborhood group. A garage or yard sale can also bring in some bucks if you’ve got enough to peddle.

7. Lower Your Housing Costs

Housing is where Americans spend the largest share of their paycheck, according to the U.S. Bureau of Labor Statistics. With rent and property prices constantly rising across the country, this can be a major issue for those living on minimum wage.

According to a 2025 report by the National Low Income Housing Coalition, a full-time worker needs to earn an hourly wage of $28.17 to afford a modest one-bedroom rental home in the U.S.

If you’re paying more than you can afford for housing, there are ways to cut the costs.

•   Consider downsizing to a smaller home or apartment, moving to a more affordable area in your town or city, getting a roommate, or living with a friend or family member while you save.

•   Look into applying for affordable public housing in your area, specifically established for eligible low-income people. The U.S. Department of Housing and Urban Development (HUD) oversees public housing agencies in your state or city. You can find your local housing authority office at hud.gov or by calling 800-955-2232.

8. Work Toward Reducing Your Debt

When you’re not bringing in a lot of money, it’s easy to accumulate debt, especially by using credit cards to get by until the next paycheck. This can leave you with high credit card bills to pay at the end of the month and increases the chance of a minimum payment you can’t afford. You can tackle the problem in a few ways:

•   Consolidate your debt by rolling multiple debt payments into one.

•   Consider a balance transfer onto one credit card with a zero or low-interest promotional rate. These can provide a period of time during which you can pay down debt before the interest rate rises.

•   Seek out help from a reputable nonprofit organization such as the National Foundation for Credit Counseling (nfcc.org), a professional credit counselor, or a financial planner who can help you create a plan to start tackling your debt.

9. Minimize Health Care Costs

Health care can take a big bite out of a tight budget. These moves may help lower health care expenses:

•   Medicaid and the Children’s Health Insurance Program (CHIP) are among the government programs providing free or low-cost health care to low-income families and individuals. To determine if you’re eligible, go to healthcare.gov, where you can also fill out an application.

•   Work toward saving on prescription drug costs at participating pharmacies with a discount card or coupons offered by companies such as GoodRx, SingleCare, or America’s Pharmacy.

•   Try a variety of things you can do to stay healthier at no cost. Take a walk, ride your bike, join a basketball game, or follow workout videos on YouTube.

10. Look to Save on Transportation

Owning a car and maintaining it can be costly. Here are some ways to lower expenses:

•   Consider the alternatives to driving a car, such as using public transportation, carpooling, walking, or riding a bike.

•   When you drive, try to limit extraneous trips to reduce mileage and wear and tear on your car.

•   Save money on gas by comparison shopping at your local fuel stations.

•   See if you can lower your car insurance payment with good driver discounts or by skipping extras that you don’t really need, such as car rental coverage or emergency roadside assistance.

11. Make the Most of Tax Breaks

When it comes time to file your taxes, make sure you’re taking advantage of whatever tax credits and deductions are offered for low- to moderate-wage employees, such as the Earned Income Tax Credit, Child Tax Credit, or Child and Dependent Care Credit. If you qualify, you can use the credits to help reduce the amount of taxes you owe and possibly increase your refund.

Recommended: What Tax Bracket Am I In?

12. Check Your Paycheck Withholding Amount

When you start a new job as a regular employee, your employer will have you fill out a W-4 form to determine how much tax money should be withheld from your pay and sent to the IRS for you. This is determined by what your tax filing status is (single or married, for example) and whether you have any dependents.

If you choose to have a large chunk of money taken from each paycheck, yes, you’ll get it back in the form of a tax refund, but it might be more useful to have that extra money on hand during the year. You can change or update the withholding information on your W-4 form with your employer at any time. What’s more, you should do so if you experience a personal life change, such as marriage, divorce, or having a child.

13. Mind Your Utility Usage

Americans pay, on average, $595 a month for utility costs, according to the latest study from Move.org. This can add up to half a minimum-wage earner’s monthly paycheck.

Fortunately, there are many ways to lower your utility bills to help with the challenge of living on minimum wage.

•   Switch to using more energy-efficient light bulbs, and you can save an average of $225 a year, based on the recommendation of the U.S. Department of Energy.

•   Avoid phantom energy usage. Turn off or unplug any appliances not in use; even those sitting idle still drain some energy from the outlet.

•   Save up to 10% on heat and cooling costs by setting your thermostat 7- 10 degrees back from its normal setting for eight hours a day (such as when you’re out at work).

•   Switching to doing cold water washes can save on gas and electricity that’s needed to heat water.

•   If you need new appliances, opt for ENERGY STAR-labeled machines, which use less water and energy than standard ones.

•   Get rid of any streaming channels you don’t watch and/or downsize to a more basic cable plan.

•   If you’re having trouble making payments, call your utility companies and see if you can negotiate rates or be put on a financial assistance payment plan.

14. Take Advantage of Any Employer-Sponsored Benefits

Make sure you make use of any plans your employer offers, including health insurance, retirement accounts such as a 401(k), daycare services, and paid time off. These things can be priceless to any employee but especially to those surviving on minimum wage.

15. Look for Cheap or No-Cost Things to Do

Living on a low-income salary doesn’t mean you have to sit at home and give up on fun. But instead of pricey entertainment and eating out, consider these ideas:

•   Check to see if any museums offer free admission on certain days.

•   Grab a slice of pizza with a friend for a cheap lunch.

•   Take a walk or a bike ride and visit the library to check out books and DVDs.

•   Host a potluck gathering with friends.

16. Check Out Your Local “Buy Nothing” Groups

Neighborhood “Buy Nothing” groups, where people post things they want to give away, have become popular. These community networks can be a great way to get clothing, food, toys, appliances, and furniture at no cost.

Not sure where to start? Visit BuyNothingProject.org or search Facebook to see if there’s a Buy Nothing group near you.

Recommended: 15 Creative Ways to Save Money

17. Be Kind to Yourself

Living on a minimum wage income can be a constant source of anxiety and stress. But think about thriving rather than just surviving on minimum wage. Be sure to practice self-care. There are lots of low-cost or no-cost ways to reward yourself, from camping out to treating yourself to a fancy coffee to finding free live music in your area.

The Importance of Having a Savings Account

When you’re living paycheck to paycheck, saving money can feel like an impossibility. But opening a high-yield savings account can be a wise move. It’s a place where your money can securely grow over time, thanks to the interest it earns. It’s also a place that may be less tempting to tap into than your checking account, and it’s less risky than, say, investing in the stock market.

You can save for a specific financial goal, such as moving to a bigger apartment, or let it grow as a nest egg for the future. Another reason it’s important to have some savings? You need an emergency fund for life’s unexpected and expensive moments, such as having a sick pet, needing a car repair, or suddenly losing your job.

Financial experts generally advise having at least three to six months’ worth of living expenses socked away. This money can help you avoid using your credit cards or the money in your checking account slated for bills when an urgent need crops up.

Can You Open a Bank Account While Earning Minimum Wage?

Yes, you can. You don’t have to have a high-paying job in order to open a bank account. Anyone in the U.S. who is 18 years old or older can open a bank account on their own, including those who are unemployed or have no income at all.

It’s important to know that many traditional banks require you to make a minimum deposit when opening a bank account, which can be anywhere between $25 and $100. However, some banks, especially online banks, will allow you to open an account with no minimum balance required.

What to Look for in a Bank on a Minimum Wage Salary

If you earn a minimum wage, you’ll likely want a bank that doesn’t have a lot of hurdles to opening an account or charge many fees. Look for these features:

•   No extra fees: Some banks tack on extra fees for different reasons, such as using an ATM not in their network, overdraft fees for having to cover for insufficient funds, or a monthly maintenance or service fee. Look for a bank that doesn’t charge these fees.

•   Interest-bearing account: A bank account that allows you to earn money on your deposits can help your money grow. Many banks don’t pay interest on checking accounts and may only pay a sliver of a percentage on savings. Shop around for a better annual percentage yield (APY).

•   No monthly minimum balance requirements: Many banks charge a monthly fee if you don’t keep a minimum balance in your account. Search for one without any rules on how much money you’re required to have in your account.

•   Low-to-no minimum deposit requirements: You may find that some banks require you to deposit a minimum amount of money in order to open an account. It could be as low as $10. However, you can also find banks that don’t require any deposit at all to start an account.

The Takeaway

People who live on a minimum-wage salary can benefit from creating and sticking to a budget, finding ways to cut costs, knowing about financial assistance programs, and finding a trusted banking partner that charges low or no fees and pays an above-average APY on their deposits.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

Is minimum wage a livable salary?

Minimum wage can be a livable salary, depending on where you live, your expenses, and how much that minimum wage is. Many states, cities, and even companies offer a higher minimum wage than the federal wage of $7.25, making it easier for people to survive. That said, in some parts of the country, you would need to earn four times the federal minimum wage to afford a one-bedroom rental.

What are some tips for lowering expenses when earning minimum wage?

Housing, transportation, and food are the biggest expenses for the average American household. Some ways you can lower these costs include downsizing your housing situation or getting a roommate, limiting restaurant meals, cutting grocery costs, and opting for public transportation. In addition, it can be worthwhile to research local and federal programs that can help you lower expenses and get more for your money, such as the Supplemental Nutrition Assistance Program (SNAP) or Medicaid.

Can you open a bank account when earning minimum wage?

Yes, you can open an account if you earn minimum wage, but it’s wise to shop around for a bank that doesn’t charge any excess fees or require a monthly minimum balance. Also, look for banks that pay a competitive annual percentage yield (APY) on your savings and possibly your checking balance as well.

Photo credit: iStock/AsiaVision

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