Is it possible to save on minimum wage?

A recent email had me inspired to write a post whether or not it’s possible to save money while earning the bare minimum?

I was contacted by someone who asked me the question if it’s possible for him to pursue financial independence, though his income is close to minimum wage.

After some research, I found out there are certain (Facebook) groups where people can pitch ideas or ask questions about being frugal or saving money. Surprisingly enough a lot of people are open and disclose their family situation, what kind of money they make and recurring costs. I noticed it’s not unusual to earn between 1200€ – 1300€ ($1430 – $1550)/ month after taxes and that a lot of people are struggling to safe. We all know it’s pretty easy to change your habits on an income of let’s say 2000€ ($2380) after taxes. However, what if you don’t make that kind of money, are single and rent an apartment.

Based on the income of the aforementioned person, I wondered if it’s possible to safe when you earn 1300€ ($1550) net/month. (He’s single and renting an apartment.)

Please note that the numbers mentioned below are solely from my own research and based on prices in Belgium and Germany. However, an error margin still needs to be taken in consideration as factors such as country, living area, utilities company and many more can differ.

Rent: 600€. (Prices like these are somewhat harder to come by but persistence is key when your income is not high).

Utilities: 150€ (This is based on our costs, meaning, being single should result in a lower amount.)

Food: 100€ (Our average food costs are 274€ for two people). I truly believe we can decrease that to 200€ if necessary, meaning 100€/person.)

Insurances: 25€ (Perhaps a legal insurance or overall insurance and health insurance. For those interested in the Belgium insurance system, I pay 7€ each month. Other contributions are deducted from your gross salary.)

Phone/cable/internet: 38€ (I pay 6,99€ for a prepaid phone card, have a Netflix account, which is 11€ and 20€ for internet access.)

Car: 0€ (If you make that kind of money, you don’t own a car. You suck it up and use public transport, bike, your legs…)

Total: 913 € ($1089)

Income:  1300 – 913 = 387€! (1550 – 1089 = $461)

If I calculate an extra buffer of 150 € for other costs, it means it should be possible to safe 237€ ($282)/month, 2844€ ($3384)/ year.

So the answer is yes! If you are willing to adapt and change your lifestyle (sometimes drastically), it’s possible to safe money every month. Move to an area where the cost of living is lower. Sell your car and use public transport. Track your expenses and watch out for sales. Consume only what you need and rethink before purchasing. Do this for a few years and I guarantee that you not only will be happier but you’ll be able to build a significant net worth! The reality is that lot’s of people live above their means, don’t track their expenses, have cars they can’t afford and keep on consuming without using their brain. Anyone seen the Black Friday madness videos?

FUTURA1
https://mydesycdn.mydesy.com/wp-content/uploads/2017/11/FUTURA1.jpg

2 thoughts on “Is it possible to save on minimum wage?

  1. towglow 12 December 2017 / 14:56

    Hi melon deal! I really like your blog, but I’m really annoyed by one tiny English mistake. The verb is “save”, not “safe”, which is an adjective that means “protected from or not exposed to danger or risk; not likely to be harmed or lost.”
    Please don’t be upset with me, but I *had* to point that out. Keep up writing and congrats for your 50.000 euros milestone.

    Like

    • themelondeal 12 December 2017 / 18:41

      Hi Towglow, thanks for noticing. This was a simple typo as the title of the post already stated the correct spelling. And don’t worry, I’m not upset ;-). Appreciate the feedback!

      Like

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