If you’re making minimum wage it may seem impossible to pay for rent and all the other expenses that come with having an apartment, but it is possible. But before you move into your new place, first you need to figure out “How much rent can I afford on minimum wage.” Here’s what you need to know.
How Much Rent Can I Afford on Minimum Wage
First off, the amount you make on minimum wage will be determined by the state you live in.
For example, here in Illinois, it is currently $11.00 dollars an hour.
It will continue to increase by one dollar a year until it reaches $15 dollars per hour.
Other states such as Indiana, which is right next door, are $7.25 dollars per hour. They follow the federal minimum wage standard.
So, affording an apartment on $7.25 an hour is much more difficult than doing so on $11.00 dollars per hour.
If you happen to live near the state line, find out what your neighboring state’s minimum wage is. If it is higher, it might make sense to get a job there as long as you don’t have to drive too far.
How to Determine What Rent You Can Afford
When you rent an apartment, your landlord will want to see that you spend no more than 30 percent of your income on rent before taxes.
So, if you are working full-time and making $7.25 dollars per hour, you would be able to spend around $350 dollars per month on rent.
($7.25 x 40 hours per week = $1,160.00 per month x .30 = $348.00)
If, on the other hand, you are making $11.00 dollars per hour, you could spend $528.00 dollars a month for an apartment.
($11.00 x 40 hours per week – $1,760.00 per month x .30 = $528)
The average studio apartment in Illinois costs $556 per month and a one-bedroom on average is $624.
Of course, if you are living in a smaller town you might be able to find something for less.
If you’re in Indiana, the average costs are the same, but your income will be much lower.
This means you might be able to afford a studio apartment on minimum wage in Illinois, but you won’t be able to in Indiana.
Let’s take a look at a more expensive state such as California.
The minimum wage is $12.00 per hour in California. That’s a bit better than Illinois, but the cost of living is much…much higher.
An average studio apartment in California is $997 dollars a month and an average one-bedroom is $1,140 per month.
With your $12.00 dollars per hour, you would only be able to afford to spend $576 dollars on an apartment.
So, you can see the problem here. Monthly rent in most places is going to be too high for your monthly income to cover.
Housing costs are going up as well, so this makes the situation even more difficult.
In most states, minimum wage workers can not afford to rent a studio apartment on their own. A one-bedroom apartment is even further out of reach even if you are a full-time worker.
This doesn’t even include all of the other living expenses that you will have to deal with.
Unfortunately, in most areas, the minimum wage is not a living wage even if you are a full-time minimum wage worker.
So, where does that leave you? What can you do to cover your monthly expenses and rent payment?
1. Consider Getting a Roommate
One option is to get a roommate, but be careful.
If you are both making minimum wage, you will need to consider sharing a bedroom. It could be tough to pay for two-bedroom rentals even with a roommate.
A one-bedroom rental could be a good option and with a roommate, the cost of housing will be cut in half for you.
They can also pay half of your utility bills which will help as well.
2. Set Up a Strict Monthly Budget
No one enjoys living on a budget, but if you do, you should be able to cover your expenses.
You will need to stick to it and cut out any unnecessary expenses.
No coffee out or eating out.
Just the basics.
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3. Get a Side Hustle
One option is to bring in more money.
Consider doing something on the side.
Pick something you enjoy and are good at.
This could be anything from selling stuff you don’t use on eBay to selling used books on Amazon or freelancing in some capacity.
The point is if you can bring in an extra $100 a week (or more) you will be able to afford your rent with or without a roommate.
You might even be able to save some money for the future as well.
4. Go Back to School
I’m not talking about college here, although that is an option.
What I am talking about is learning a trade.
Getting a certificate in something or even a degree usually only takes a few months to a year.
There are many trades such as plumbing, electrical work, working in a machine shop, and more that pay really well and far…far above minimum wage.
Most of these trades are desperate for workers as well.
The jobs typically come with really good benefits as well.
The great thing about learning a trade is you don’t have to go through years of schooling to get into the profession.
Very quickly, you can get the certificate you need and start working.
Then you should be able to afford an apartment without any trouble.
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To Sum it All Up:
It can be really tough to afford rent on minimum wage. Sometimes it is downright impossible.
Consider getting a roommate, a side gig, or going back to learn a trade. Any or all of these can make a world of difference for you and your finances.