-38 percent of all American workers made less than $20,000 last year.
-51 percent of all American workers made less than $30,000 last year.
-62 percent of all American workers made less than $40,000 last year.
-71 percent of all American workers made less than $50,000 last year.
Those are some scary statistics. If you currently work at a full-time job that pays $10/hour, you will make approximately $21,000 a year, which is considered poverty level, depending on your family size. Unfortunately, a lot of the jobs available right now pay between $8-10/hour, so it’s no wonder many families are struggling financially.
At that rate of pay, most people don’t have a lot of money left over after the bills are paid, though they might have a couple of $20 bills in their wallet to get them through the week. $20 is a ubiquitous amount—primarily because it’s what the ATM machine spits out. But if asked, $20-40 in available cash is all that many lower income wage earners have to get them through the week. And that cash probably has a whole list of need-to-buy items attached to it; everything from filling up the gas tank to purchasing food at the grocery store.
With limited available funds, it’s hard to envision that you can do something broad with them, so the $20-40 gets chewed up throughout the week in random purchases. The US Bureau of Labor Statistics says that in 2015, 4.5% of our money was spent in a category called “miscellaneous.” That might include expenses such as buying lunch out instead of packing, hitting the vending machines at work, or just purchasing little “pick me ups” that can chew through that $20 pretty quickly.
Here’s a thought: if you commit to not spending $5 a week ($20/month) out of your available cash, you can save $260 a year. That money can then be used to start an emergency fund, pay a car repair bill, or to take a small, weekend getaway, and the process is simple and easy! Every week, pull out a $5 bill, put it somewhere safe, and don’t touch it. It’s a small enough amount that you still have available cash for gas or food, but big enough to make a difference. Better yet? If you keep going for four years, you will have over $1000 saved.
We all know bad things are going to happen to us, we just don’t know what or when. “Murphy’s Law” is always in effect—if something can go wrong, it will. And it seems to happen more frequently to those who don’t have adequate incomes, primarily because their possessions (like vehicles) are older and more vulnerable to wearing out. But knowing you have prepared for emergencies will allow you to sleep better at night, feel like you have some control, and give you the confidence to move onto even bigger goals and dreams.