If you’ve spent much time on sites related to economics and personal finance in the last week, you’ve probably seen mention of the “McDonalds budget”. The site, sponsored by McDonalds and Visa, describes how a person can get by and even save money while working for minimum wage.
Several articles criticized the budget for presenting unrealistic views of how people have to spend money in order to survive, often pointing to this budget as evidence for why the minimum wage should be raised.
Ignoring the potential political and social ramifications of this, there are several valuable personal finance lessons to be learned here.
First, it is incredibly hard to get by if you’re working for minimum wage. This should be self-evident, of course. A full time federal minimum wage job brings home about $1,100 a month. That’s incredibly difficult to survive on even in low cost-of-living areas.
What’s the message here? You need skills. Most minimum wage jobs require you to bring little skill to the table. In order to earn more, you need to be bringing more skills to the table.
There are several routes to acquiring skills. The easiest for many people stuck in a minimum wage situation is to look for a trade school, which can provide certification of a particular skill in a relatively short time at a relatively low cost.
That’s your best ticket toward increasing your earnings, which is vital if you’re earning minimum wage. This budget should be used as a tool to help you get to that stage.
Second, there are many public sources of aid. Food pantries and government programs are out there to take the edge off of the expenses in many categories in this budget.
There is nothing wrong with accepting aid and there is nothing wrong with utilizing a local food pantry or other such service. Those services are out there to help people who are struggling but are trying to get ahead and make a better life for themselves.
Yes, we can discuss the socioeconomic implications of companies paying workers so little that they have to rely on public services, but that doesn’t help the person who is trying to get by or, ideally, trying to escape a minimum wage situation. They need to take advantage of what resources they have in order to get on a better financial track.
Third, it’s vital to remember that people who use budgeting tools like this when in a minimum wage situation are the ones trying to better themselves. Their life path to date has led them to a low-paying job, but that’s not the end of their story. It’s one bump on the road.
If someone is willing to examine themselves and make a few hard choices in order to improve themselves – and, let’s face it, that’s what budgeting is – then this budget structure can help them escape.
Fourth, surviving with a low income works much better if you share resources with others. If I were in a situation where I was earning minimum wage, the first thing I’d do is get a roommate – at least one.
I would essentially treat the situation as not being too different than when I was in college. Money is tight, so what’s the least expensive route to making sure I have the basics? Rent gets far cheaper with roommates, as does utilities. Food can get cheaper, too, depending on the roommates and how you share resources.
A committed couple will find it far easier to handle this budget than a single person can because many of the expenses will stay fixed while the income level can often double with two people working.
For many of you, the points in this article won’t apply to your day-to-day life. You likely have a higher income level, one that puts you at a point where you don’t have to worry about this too much, and you’re more interested in the social and economic factors.
If you want to do something, support organizations that help people who are struggling to get by and don’t support organizations and businesses that make it difficult for people to get by. Spend your money at businesses that give employees a chance to get ahead. Donate to the local organizations in your community that actually get to know people and can offer specific help to individual families – namely, the local food pantries, which are quite often wonderful organizations.
As tempting as it might be to criticize this budget and to criticize the system that made this budget necessary, don’t waste your energy. There are plenty of people out there criticizing. Instead, focus on doing what you can so that the people who are actually struggling in your community can begin to turn things around. Remember, a rising tide lifts all boats.