Is financial independence possible on minimum wage?

If you're single, Hamm argues that you can save for retirement, even on the smallest of paychecks. 

  • close
    Workers prepare for lunch in the kitchen at the Palio D'Asti restaurant in San Francisco. Hamm argues that saving on minimum wage is possible, if saving is the highest priority.
    Eric Risberg/AP/File
    View Caption
  • About video ads
    View Caption

Greg writes in:

"I don’t see how a person making minimum wage can ever become financially independent. It’s basically impossible."

It’s far from impossible. It’s just a matter of priorities.

Let’s say you’re single and live in Washington state, where minimum wage is $9.19 per hour. You work forty hours a week for fifty weeks a year, earning $18,380. According to this Washington state tax calculator, you’ll end up bringing home an amount very close to $295.20 every week throughout the year.

The first step is to find an inexpensive place to live. If you’re willing to work for minimum wage, you can find work in a lot of places. This site reports that a single parent and two children can live in Wahkiakum County on $32,997 per year, which means a single adult should be able to pull it off on $18,380 per year.

Once you’ve done that, you have to pay attention to your expenses, starting with the big ones. Do youreally need a car in the area where you live? If you live close to work and have access to groceries and the doctor, you can probably do without it, which saves you a lot of money each month. Do you really need extra living space as a single person? Just rent a small space with one bedroom or even an efficiency, or rent an apartment or a small house with some roommates.

You should also whittle down your monthly bills. Use a pay-as-you-go cell phone. Use the internet at the library and skip it at home. Don’t have a cable bill – instead, just stick up an antenna and enjoy the dozens of over-the-air channels that are now out there (most stations now have two or three digital channels).

Food can be tricky, but you can live pretty cheap if you stick to generics, eat a lot of whatever produce is on sale, and watch for food sales. A single person can easily eat on $150 to $200 a month if they’re careful.

Afraid you’ll be bored? Cultivate a network of friends that do free stuff. See if the town has a parks and recreation department and get involved. Start an ultimate Frisbee league in the park. Invite people over for movie nights and have everyone bring a beverage to share. Get involved in any local organizations, as they usually have a lot of activities that are free. Go to any and all community dinners as you’ll usually get a good meal at the same price or lower than what it would cost at home and you can meet a lot of interesting people.

Channel the rest of your spare time into earning extra money. Mow lawns for $10 a pop. Deliver groceries. Deliver pizza. You can do these on a part-time basis to supplement your income.

Allot yourself a little money for incidental spending, but make absolutely sure that you’re socking away at least 10% of your paycheck each week into a savings account. That’s going to be about $30 a week. Do nottouch that money. When it starts to build up, invest it. Spend time at the library learning about how to invest properly and start putting that extra money to good use. If you earn extra money from a side business or other jobs, sock some of that away, too.

Let’s say you’re able to save just $30 a week following a plan like this. $30 a week for 52 weeks adds up to $1,560 per year. Let’s say you invest that in stocks that return 7% over the long haul. After nine years, you’ll have more than a year’s worth of your income in the bank. After 20 years, you’ll have over $60,000 in the bank.

Now, let’s say you find a way to stick another $30 per week into the bank. At the thirty year mark, you’ll have $294,000 in the bank. If you continue to live on about $17,000 a year, that money will last you for the rest of your life – you can live off the interest.

If you start this at age eighteen, you’re done working at age 48.

This is just an example, of course, and I’m not figuring in things like life changes (getting married, having a kid) and I’m not worried about inflation, either (I’m assuming that minimum wage keeps up with it and that you raise your savings to match your raises along the way).

Still, the point is clear: anyone can do this if they choose to make savings a priority in their life. If you choose not to do that, you pay for it over the long haul. Every frivolous thing you throw your money at pushes financial independence further and further away and, if you have a low income, every little bit matters.

It’s not a matter of “I can’t do this.” It’s a matter of “I choose other things instead of doing this.”

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on

Make a Difference
Inspired? Here are some ways to make a difference on this issue.
FREE Newsletters
Get the Monitor stories you care about delivered to your inbox.

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.




Save for later


Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items


Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items


Failed to save

You have already saved this item.

View Saved Items