At the beginning of September, Albertan minimum wage workers saw an increase of 25 cents, from an hourly wage of $9.95 to $10.20, making Alberta the last province to break the $10 per hour mark. Any increase is a good one for minimum-wage workers, but many say that it just isn’t enough.
Public Interest Alberta (PIA) says over 42,000 people earned between $9.95 and $10.20 per hour in June 2014. Quoting numbers from Statistics Canada, PIA also says that it’s not just teenagers making minimum wage – 77 per cent of all low-wage workers in Alberta are over the age of 20. Calgary’s Living Wage Action Team determined that a full-time employee in Calgary needs to make $17.29 per hour in order to maintain a sustainable, dignified lifestyle with the ability to save for future goals.
That’s a shortage of $7.09 per hour, or nearly a thousand dollars per month.
Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, says low wages can lead to stressful lives and deep debt.
“People who are earning minimum wage have to do a whole lot with very little,” says Schwartz. “All across Canada, we hear from people who needed to lean on credit cards and payday loans just to buy the basics. This can spiral into a disaster very quickly.”
One of the main ways people can avoid debt is to create a budget and stick to it. And while a budget might sound limiting and restraining, particularly for a low-wage worker, it can be the complete opposite. Budgeting puts your money back under your control and helps you achieve your financial goals.
Consolidated Credit offers the following budgeting percentages for people who want to make the most out their money:
Once you’ve got your guidelines, you can put the wheels in motion in four easy steps:
- Track your income – Write down all sources of income. This includes including gifts, bonuses, tax refunds, cost of living increases, dividends, and so on.
- Categorize your spending – Divide your expenses into three categories:
Fixed – Spending that is the same every month, like rent, insurance, and car payments.
Flexible – Spending that you control, such as household and grocery items, utilities, and entertainment.
Discretionary – Spending that is not necessary for survival like restaurant bills and entertainment.
- Add and subtract – Add up your monthly expenses and subtract the total from your monthly income. If there is a negative result, then you need to adjust your spending. Discretionary spending will be the first to go.
- Prioritize – If you need to make adjustments, compare your spending with our budget percentages and make some changes. Focus on needs vs. wants.
“With people having to do more with less, they have to maximize their income,” says Schwartz. “Using a smart budget will cut out unnecessary spending and help you move toward some financial breathing room.“