How to Make Money

How One Family of 4 Lives Well on $11 an Hour

July 7, 2015
by Susan Shain
Senior Writer
Living Paycheck to Paycheck

We often hear about the struggles of people earning our nation’s minimum wage. By all accounts, it is extremely difficult to survive on $7.25 an hour.

But what about the families who earn more than the minimum wage — too much to qualify for government assistance, but not enough to make ends meet without a struggle? Their stories often go untold.

Over at Wise Bread, Emily Guy Birken interviewed one family who lives well on $11 an hour. The Luhs are a young couple who live in Ohio with their two children; together, they earn less than $40,000 per year.

For a family of four, the federal poverty threshold is $24,250, and for food assistance in Ohio, it’s $31,525.

So though they don’t qualify for many assistance programs, Birken says: “By any metric, Samantha and John are bringing in a modest income, and many young parents would find it challenging to raise two kids on so little money.”

How the Luhs Make It Work

It hasn’t been easy, but the Luhs have figured out how to survive — and enjoy life — on their limited budget.

Here are our favorite strategies from their interview:

They Constantly Re-assess Their Budget

When you’re living paycheck-to-paycheck, a “set-it-and-forget-it” budget won’t work. They constantly track and adjust their spending, and when extra money comes in, they save it for non-essentials like gifts.

And if they ever run into trouble paying their bills? They already have a plan in place: getting rid of their no-contract cell phones.

They Determine Clear Priorities

Saving money is far more difficult if you don’t know what you’re saving for. This wasn’t a problem for the Luhs, who knew exactly where their priorities lay. They wanted a house, so they worked hard to build up their credit and save for a down payment on a $101,000 home.

They Stash Gift Cards for Splurges

The next time you receive a gift card, take a cue from the Luhs and hide it in a drawer. Then, when you feel the urge to splurge, you can fulfill it with one of your gift cards — and avoid spending any of your own money. Smart, right?

Of course, it’s worth pointing out that the Luhs live in a comparatively affordable area of the country. As one commenter griped: “Try buying a house on 11 dollars an hour… anywhere in the northeast United States. You might be able to get a bridge to live under in New Jersey.”

To us, though, that doesn’t detract from the Luhs’ success: In their area, the median income is $65,000 — 62.5% more than what they earn. So we’re still quite impressed with this young couple’s determination and frugality.

Your Turn: Do you make it work on $11 an hour? Any tips to share?

Susan Shain (@Susan_Shain) is a freelance writer and travel blogger who is always seeking adventure on a budget.

by Susan Shain
Contributor for The Penny Hoarder

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