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Those who make below a living wage “make insufficient income to live locally given the local cost of living,” according to Poverty in America.
Use this living wage calculator to determine if you fit into this group. You can also see which professions you should aim for in order to rise above the living wage for your state.
Of course, the long-term plan for most below the living wage is to work toward raising one’s wage and to make it to a point where you are no longer struggling. Meanwhile, you must still survive day-to-day life while working towards that goal.
That’s where things become difficult…
See the living wage in all states.
I’ve found that some of the best ways to save money on food expenses (which typically costs $273 a month for a single parent supporting one child) to:
- Get creative with leftovers and stop wasting food
- Take the time to use coupons; think of them as brightly colored money.
- Find out when your local grocery store marks down items each day, and take advantage of these day old groceries.
- Learn some bulk shopping techniques for regular grocery stores.
Lowering childcare costs can be tricky. You don’t want to sacrifice the care of your child. At the same time, you don’t want to blow your budget. So you have to get truly creative.
For a single parent surviving on one income, quitting your job to save on childcare costs is a bad idea. Instead, find creative ways to lower the $411 a month (or more) it will take to provide care for your child.
A couple of creative ideas:
- Split the cost of a private babysitter or nanny with a close friend or family member. Two or 3 parents coming together for this purpose can actually pay a quality sitter more than they would make working in a daycare center.
- Trade child care with someone who works a different shift than you. For example, if you work from 7 to 4, and a neighbor works from 5 til midnight, you can both watch each others’ child and also get a good night’s sleep.
Medical costs are difficult to avoid. They are, however, easy to plan for. The biggest problem people on a tight budget make is not planning ahead for medical expenses.
Consider asking your employer about a health savings account — especially if you or your child are prone to illness.
Either way, you should be putting away about $225 for medical expenses; this is on top of health insurance costs.
Don’t forget that there are co-pays for prescriptions and doctor visits that you will also have to cover.
Transportation costs are a lot like medical expenses. You will have your normal everyday costs that you are used to, then you will have the occasional unexpected cost in the form of a new tire, or a new car engine.
Failure to save for these unexpected costs will be your biggest issue. If you put aside $127 a month to cover gas, oil changes, and maintenance, you should be in good shape.
Then again, you could move closer to your job and your child’s activities, and avoid dealing with a car altogether. You will still need bus and taxi fare occasionally, but your budget should still be lowered.
Housing costs are probably the largest part of any household budget. At $1,133 a month on average, for a single parent making less than a living wage, it can take up one half or more of your income.
Lowering your living standards to lower your housing costs can be dangerous for both you and your child. This area will be your least flexible, but there are still sacrifices that can be made.
My best advice is to find a close relative in a similar situation and share an apartment with them. For example, a 2-bedroom apartment costs $800/mo. in the Atlanta area, while a 4-bedroom apartment costs about $1,300/mo. By sharing, you can lower your housing costs by $150 a month, and possibly even trade childcare.
Combining your resources can also help you to move into a nicer and safer area. Of course, you will need to have a great relationship, choose someone with similar a work ethic, and be willing to work hard to get along and give each other space. If you know that you don’t have the kind of personality that it takes to share living space, then you may want to skip this idea altogether.
Miscellaneous expenses are the biggest problem with any budget. Everyone has them, but no one really knows what they are or how much they will amount to. Still, they can be controlled.
Take a look at how these people learned to control their miscellaneous expenses, even if it was just an experiment.
NOTE: Prices mentioned above are based on the Living Wage Calculator.
I have been a certified tightwad striving for financial freedom since I became pregnant with my first child — and I decided to find a way to stay home with him full-time. I enjoy sharing my personal experiences in my journey back to financial health and planning for a future — which will include sending 2 kids to college and early retirement.