The new minimum wage will increase to $15 an hour by October 1. This is good news for the people of Manitoba; however, is it enough to live on the necessary living wage given the inflation rates?
The larger your family is, the harder it is to live on minimum wage, even the new minimum wage, but here are some ways to make it possible.
Keep Housing Costs Affordable
Housing is the highest monthly expense and most necessary for most people. Ideally, your housing shouldn’t take up more than 25% of your income to leave room for other essential expenses.
If you make $15 an hour and work full-time, your annual income before taxes is $31,200 or $2,600 monthly. Your housing expenses (rent or mortgage) shouldn’t exceed $650. This may seem impossible with today’s costs, but some ways to keep costs down include:
- Have a roommate
- Downsize the size of your home or apartment
Keep Utility Costs Low
Utilities cover a wide range of services needed to run a household. Heat, electricity, internet, water, and phone bills fall under this category. Despite the large number of bills in this category, they shouldn’t take up more than 10% of your income.
Using the $15 an hour example, your utility bills should be less than $260 monthly, which could get tricky. Here are some ways to help.
- Turn the A/C or heat down when no one is home or at night
- Unplug all unused appliances and electronics
- Turn off lights in each room when not in use
- Only run the washing machine, dishwasher, or dryer during off-peak hours
- Bundle your internet and cellphone plans and choose a minimal plan
Minimize Transportation Expenses
Transportation can take up as much of your budget as housing if you aren’t careful, especially with today’s high gas prices. Try keeping your costs at 10% – 15% of your income.
To minimize your costs, consider using public transportation, ridesharing, and combining your errands into one trip to minimize the times you have to go out. Also, avoid buying a car you can’t afford, and instead, pay cash for a vehicle or finance an inexpensive car (avoid cars with all the bells and whistles).
Don’t forget that you’ll also include insurance, parking, tolls, and car maintenance in your transportation costs.
Cutting your monthly expenses down as much as possible will help you save to spend. In other words, pay for the necessities while saving as much as possible. In addition, the money you’re able to put away can help with future purchases you must make that are outside the standard percentages of living on minimum wage.
At Creditaid, we understand how difficult it can be to live on living wage on minimum wage. Our professionals can help you put together the proper budget so you’re meeting your needs while not going over your budget. Contact us today for your free consultation.