Two years ago, I was in that same position--hustling for every last penny, doing everything I could to make just a little bit of money and applying for every job I came across. At that time, my only thought was that I had to keep some money coming in, so my savings account wouldn't be gutted in six months. I looked at my income differently because instead of trying to get ahead, I was trying to stop myself from inevitably getting behind--if that makes sense.
The first real job I got after finishing grad school, was the 19-hour-a-week position I still have. That earned me just enough money to break even each month. But I also get paid a professional salary. My job requires a masters degree, and since it's at one of the largest libraries in the state, they pay about $5 more per hour than my job at the smaller library did. Even with that, it was a struggle, so, inspired by this post at So Over Debt, I decided to run the numbers and see if I could actually live working 40 hours per week on minimum wage.
As of 2007, the minimum wage in the state of Rhode Island is $7.40. That works out to $1184 per month before taxes. Rhode Island also has one of the highest rates of state income tax, so let's just estimate that the monthly take-home pay is $1000.
Presently my budget breaks down this way:
Utilities: $100 (varies month-to-month, but this is a fair estimate)
Food: $150 ($300 for the two of us, but I'm just looking at myself here)
Gas: $150 (varies, but this is the average)
Household: $50 (toilet paper and the like).
Total: $1010, which means that any kind of financial emergency completely wipes me out and I'm using savings just to get by (assuming the me in this scenario has savings). Car dies? Car stays dead, and I can't get to work anymore. I also left off the $50/ month for my phone--if I was only earning $7.40/hour, I'd just get rid of it. I only really use it as an alarm clock anyway. Let's do some tweaking.
Let's say that instead of working two jobs and commuting 28 days a month, I just have one job within walking distance from my house. If I worked at the Dunkin Donuts five blocks away, I could sell my car and stop buying gas. That would save me the $150 per month on gas, and also the $350 I'm getting charged this year in car tax from the city. The downside to that is, I'd have to start shopping at the two markets closest to me, which are significantly more expensive than where I usually shop.
That would make my budget look about like this:
Gas: $10 ($10/a month if I start using BF's scooter, but it scares me, or $10/month bus fare)
Household: $100 (toilet paper and the like).
Total: $970. At least I'm not over, but I could never make any student loan payments, or really save anything. Potentially, I could save on household items if I took the bus out to Target or another store where items like that are cheaper than the places within walking distance. This budget means no clothes, no eating out, no doctor or dentist visits, no retirement savings, no vacations ever.
This little experiment does make me grateful that I have pretty much everything I need within walking distance. I have access to two grocery stores, plenty of corner stores, a library and even a farmer's market in the summer. I could survive, but certainly couldn't thrive, and the thought of living one paycheck away from financial ruin certainly would impact my quality of life.
How about you? Could you do it?