Making ends meet on minimum wage, currently at $6.55 per hour is tough. As the numbers for a basic wage, tax and net pay breakdown show, there is not a whole lot left over after the “Tax Man” gets his cut. Just the tax on the wages earned come to just over 22% of gross wages and that’s not including the medical deduction if you’re lucky enough to have an employer who offers it. I distinctly remember working for minimum wage when my wife and I were starting out. The local fast food restaurants were a frequent stop in our effort to save money. If we had been a little more money savvy, we’d have eaten at home and saved the leftovers.
One of the ways I boosted my income was finding a part-time job at a local fast food restaurant. Taking this job offered several benefits over trying to get extra income from my primary job by working over time. Fast food restaurants often offer discounted or free meals to employees if they work a shift. Another benefit is that a lot of food that would otherwise be thrown out at the close of the day is willingly given to employees if they ask.
So, in our example of “Minimum Wage Earner”’s wage breakdown, I can add 20 hours a week at $6.55 per hours minus taxes and be able to afford insurance, taxes, tag and phone. And lest we not forget, the dollar a day into a savings account.
It’s even more difficult to work those extra twenty hours a week and give up your “down time” from your primary job. I did this myself for 8 months when my wife told me we were expecting our first child. Actually I work 40 extra hours a week or pretty close to it. No, I didn’t get much sleep. But, the point is to take the money and do something smart/useful with it like put it in savings, pay off a debt, prepay an upcoming bill, etc. Trying to maintain a hectic work schedule and long hours will make you old … fast.
The high yield savings account at HSBC is setup (finally) and I’ll be updating this blog with the results of the monthly statement in October. One of the things that I did forget is that 2008 is a leap year, so I need to add an extra dollar for that extra day in February. I’ll do that on or after the 26th of September when I make my next scheduled deposit of $14 dollars.
$262.00 Gross Wages (20 hour Bi-Weekly Payroll)
$24.30 Federal Tax (Zero exemptions)
$14.41 State Tax (This was figured for NC, no local tax)
$203.25 Net Pay (What you take home)
The Spectrum of Personal Finance
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