It can be tough to get out of debt and build savings even if your income is above average. If it’s average (or less), the challenge becomes even greater. And what if you’re earning only minimum wage (or something a little over)? In cases like this, is saving even possible? Yesterday, a reader named Andrew asked this question on the Get Rich Slowly page at Facebook:

Reader question
Andrew’s question from Facebook

I love this question. Andrew should be applauded for his desire to get ahead financially even though his income is limited. That’s a great attitude.

Before I share some suggestions, I should note that in order to achieve big financial goals, Andrew will eventually need to make more money. I’m guessing he already knows that, though. For now, let’s focus on making the most of his current income.

Because his income is relatively low, Andrew’s only choice is to cut costs. In order to have money left over to save, he has to reduce his basic expenses. That’s easy to say, of course, but it can be more difficult to put into practice. My top recommendations for cutting costs quickly?

I think his first step should be to tackle the big stuff:

  • Housing is the biggest budget-buster for most people, and if Andrew can keep this cost low, it’ll help him create a surplus he can save. That means finding a cheap room for rent, or sharing an apartment with roommate — or maybe even living at home with his parents.
  • Transportation is another huge expense, and if Andrew can keep his costs low here, that’ll allow him to build savings. His best bet is to opt against owning a car (unless it’s too late). If I were making minimum wage, I’d travel by walking and biking and riding the bus.
  • Food can chew up the cash, too, which is probably why GRS readers tend to love articles about how to make the most of your food budget.

I also think one key to being able to save while earning a small income is to reduce recurring monthly expenses. For instance, if you’re making minimum wage, I think it’s a good idea to skip the cell phone. (If you need one, use a prepaid cell phone instead of carrying a contract.) Don’t have cable television. Or subscribe to magazines. Or joining a gym. In fact, don’t sign up for any sort of ongoing recurring expense. These expenses are like anchors, especially when your income is limited.

By doing these things, Andrew should be able to keep his expenses low so that he’s able to end up with a surplus. And what should he do with this surplus? Open a savings account, of course! If he doesn’t have one already, he should build his emergency fund so that he’s prepared for the crap life flings his way.

Those are my suggestions for Andrew. What are yours? If you were (or are) making only minimum wage — or a little above — what sorts of things would you do in order to save money?

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