Living paycheck to paycheck is an unfortunate reality for many Americans. Whether you’re working sporadically or holding down multiple jobs to make ends meet, this guide can offer some advice and resources to help you stretch your earnings.
Look for the symbols below throughout the guide to discover special resources for each group :
- HHomeless Individuals
Who’s Low Income?
Each of us might have a different idea of what constitutes “low-income.” Where you live matters, too. In San Francisco, for example, a person making less than $62,000 in 2014 wouldn’t be able afford a one-bedroom apartment according to the National Low-Income Housing Coalition. In North Dakota, that sort of salary could put a family into a large house with a yard.
The federal government has its own definitions of “low income.” The definitions matter, because agencies use them to determine which households qualify for tax breaks and other government benefits.
By government standards, “low-income” earners are men and women whose household income is less than double the Federal Poverty Level (FPL). For a single person household, the 2016 FPL was $11,880 a year. That means that a single person making less than $23,600 a year would be considered low income. For a five-person household, the FPL is $28,440 and the cut-off for low income is $56,880.
There are significant racial disparities within the low income earner population. A study in 2013 revealed that households headed by racial minorities were nearly twice as likely to be low-income or poor as non-minority households. Hispanic and African-American households have median incomes significantly lower than non-Hispanic white and Asian households.
If your household is less than four times the poverty level, you may be eligible for some type of government assistance. Knowing where you stand can reveal which benefits are available and unavailable to you. For example, in some states, a household at 1.5 times the FPL would qualify for reduced-price school lunches, but not SNAP (food stamp) benefits. It’s important to look into your state’s standards for each program.
Below, enter your annual household income and the number of people in your household, including yourself. Based on this information, we will provide your percentage of the Federal poverty level, and an explanation below of what benefits this may entitle you to.
Benefits you may be entitled to based on your percentage of the FPL
|Percentage of FPL||0%||1-100%||100-138%||138-150%||150-185%||185-200%||200-250%||250-400%|
|Medicaid and CHIP (Non-Expansion State)||
If you are a childless adult.
If you are a parent. Exact percentage varies by state.
If you are a child. Exact percentage varies by state.
If you are pregnant. Exact percentage varies by state.
|Medicaid and CHIP (Expansion State)||
If you are an adult.
If you are pregnant. Varies by state.
If you are a child. Can be as high as 400%, but varies by state.
130% or below
|WIC (for pregnant and mothers with children 0-5)||
185% or below
|National School Lunch||
130% or below, Free
185% or below, Reduced Price
|School Breakfast Program||
130% or below, Free
185% or below, Reduced Price
|Special Milk Program for Children||
130% or below, Free
185% or below, Reduced Price
|Summer Food Service Program||
130% or below, Free
185% or below, Reduced Price
|Child and Adult Food Program||
130% or below, Free
185% or below, Reduced Price
|Low Income Taxpayer Clinic||
250% or below
|United Way Rent Assistance||
150% or below
150% or below
|Emergency Shelter Grant||
150% or below
200% or below, varies by state.
|Advanced Premium Tax Credits (Non-Expansion States)||
400% or below
|Advanced Premium Tax Credits (Non-Expansion States)||
138% and below eligible for Medicaid instead
Meeting Your Basic Needs
When money is tight, some Americans end up going without things that the wealthy would consider essential—like visits to the doctor or regular meals. But even people who don’t make much money can find ways to get the essentials in life, including nutrition, housing and transportation.
Staying healthy is important regardless of your income. A health crisis can wreak financial havoc on anyone, and low-income earners are particularly vulnerable. Staying proactive about your health by eating right, exercising and getting regular check-ups is the best way to avoid trouble. When that’s not enough, though, there are ways to get the care you or your family members need.Physical PChildren’s Health Insurance Program (CHIP)
CHIP provides medical care for about seven million children per year. Any parent, legal guardian or grandparent can apply on behalf of a child (including teenage children). For households who meet the income eligibility limits, health insurance for children may be completely free. Each state decides how their CHIP program works. Some have expanded Medicaid to make CHIP available to more families, and some have kept Medicaid and CHIP separate. This map explains how CHIP works in each state.SMedicare Savings Programs
All Americans who have resided in the U.S. for five or more years qualify for Medicare when they turn 65, and some people qualify even younger. There are four types of plans that can help you save money on Medicare premiums: Qualified Medicare Beneficiaries (QMB), Specified Low-Income Medicare Beneficiary (SLMB), Qualifying Individual (QI) and Qualified Disabled and Working Individuals (QDWI). If you qualify for any of these plans, you can also use Medicare Part D to get assistance with prescription drug costs.
To qualify for a Medicare Savings Program, you’ll need to fill out an application. But first find out whether you meet the initial financial requirements here. They’ll want to know how much money you have in the bank as well as any investments.Medicaid
Medicaid is a federal program that offers affordable healthcare to low-income Americans of any age. Some Americans are “dual” eligible for both Medicaid and Medicare (Part A or B). In 2014, some states chose to expand Medicaid eligibility (which is based on income). Use this search tool to contact your state and find out what Medicaid eligibility requirements are.
If you are a minority and feel that your or your family have suffered housing discrimination, call HUD’s Housing Discrimination Hotline at 1-800-699-9777.
For low-income families, the stigma associated with mental illness can be compounded by a lack of resources. But there has been some welcome progress. Since the early 1960s, community mental health centers offering affordable care have expanded throughout the country. Mental Health America offers a list of resources for individuals looking for affordable behavioral healthcare in their area.
Medicaid, Medicare, and CHIP all pay for mental health services, including counseling, but there are also community resources out there, including education and support groups. The National Alliance on Mental Illness (NAMI) and Mental Health America (MHA) are two national groups with local chapters. Both offer a host of resources, including information on local providers who take Medicaid or who charge on a sliding scale.
VNAMI is aware of the significance of veterans’ and servicemembers’ mental health: a list of resources is compiled on their website here. Vetearns can also access services through their local VA hospital. Counseling, suicide prevention and other mental health services are offered through the National Military Family Association , the National Center for PTSD , and the Veterans Crisis Line. Veterans in crisis can also call the Veterans Combat Call Center at 1-877-WAR-VETS to talk to another combat veteran. The Iraq and Afghanistan Veterans of America (IAVA) also has specific mental health resources, which you can find here.
Finding and keeping a decent, comfortable place to live can be a constant struggle for people with limited incomes. The stakes couldn’t be higher: Just a few missed rent payments can upend lives. Fortunately, there are many resources available for anyone who needs help with housing.Research Government Resources
Low-income families may be eligible for public housing. The Department of Housing and Urban Development has an interactive map which you can use to select your state and receive contact information for your local housing authority. Bear in mind that subsidized housing waiting lists can be very long (even years long). So if this is your Plan A, be sure to have a Plan B, too.
For families interested in home ownership, it’s worth noting that PHA’s (public housing authorities) can sell homes to qualifying families. Look at this Department of Housing and Urban Development page to read more about homeownership through public housing.
But let’s say you’re just looking for an apartment. Use this search tool on the HUD website to look for low-rent apartments in your area.
Housing Choice Vouchers, available from local public housing agencies, allow recipients to pay reduced rent on a house or apartment of their choice, as long as it meets certain safety standards. The landlord has to agree to participate in the program, and, again, the waiting list of needy families can be very long.
If you are a minority and feel that you or your family have suffered housing discrimination, call HUD’s Housing Discrimination Hotline at 1-800-669-9777.
Habitat for Humanity is an organization that works with low-income earners to help them become successful homeowners.
Single moms should look into Co-Abode, a house-sharing resource for single moms and their kids. Start with a short-term rental so you can evict an unsuitable roommate if necessary.
If you own a home, but are having trouble keeping up with repairs, there are programs that may help you get a low-or no-cost loan or grant.
Programmable thermostats aren’t expensive, and they pay for themselves very quickly. They make it possible to keep the heat or air conditioning turned down or off at specific times of day. Check with your local utility too. It may be possible for someone to do an energy audit, essentially a walk-through of your home with the auditor pointing out specific ways you can lower costs.
Consult this Environmental Protection Agency resource for low- or no-cost tips on how to save energy around the house. You can also check out this weatherization assistance program, which provides funding to local agencies to help low-income earners save. There is a special section to find a program in your area.
Low-income earners can even apply for energy benefits through the government’s Low Income Earners Energy Assistance Program (LIHEAP). You can find the income requirements per household here.SDownsize Before You Retire
Moving your whole family can be a major hassle, but many people can save money by getting a smaller place. Just think: Would living in an apartment or condo enable you to put aside more money each month for emergencies? Make a list of your real housing needs, then start looking at the local housing market with fresh eyes.
Eating well on a budget might sound too good to be true, but it’s a goal that’s within reach. Government-run programs, community resources and even apps can help low-income individuals and families get the nutrition they need.
First, there is the well-known government program WIC, or Women, Infants and Children. WIC serves low-income women who are pregnant or mothers of children up to age five, offering supplemental food, nutrition-centered education and referrals for healthcare services. You can locate your WIC office here. WIC has a free pre-screening tool for women trying to figure out whether they’ll qualify.
The USDA’s School Breakfast Program and School Lunch Program offer free or low-cost meals to students.
Check to see if Feeding America offers a School Pantry and Summer Food Service Program in your area.
Feeding America also runs Second Harvest food pantries throughout the United States. Many churches and religious centers offer free meals on a first come, first-served basis. Here is a database to locate food pantries in your area.
Another well-known service is SNAP, or Supplemental Nutrition Assistance Program, often called the “food stamps” program. Major grocery stores, some restaurants and a growing number of farmer’s markets accept SNAP cards as payment; use the SNAP Retailer Locator if you’re curious about stores near you. Not sure if you qualify? SNAP has a free pre-screening tool. Your local SNAP office can give you directions on how to apply. If you’re having trouble navigating the application, either ask the local SNAP office for help or utilize outside resources. For example, the smartphone app EasyFoodStamps can help you start the SNAP application process from wherever you are if you have a smart phone or computer access. Food pantries can also provide application assistance.Making Your Money Go Further
Preparation and planning are the name of the game when it comes to saving money on your meals.
A weekly or even monthly menu can save money, time and energy. Start planning before you even leave for the store: knowing what you’re going to prepare means you’re not buying on impulse. Websites like Coupon Sherpa and Cool Savings give you a chance to search for coupons to save once you’ve made your list.
MoneyGeek’s Affordable Eating and Wellness Guide provides tips for shopping at the grocery store and eating strategically at home. Breakout sections in the guide address busy parents and students specifically.
Cooking from scratch is a great way to save. If you’re not confident in the kitchen, try searching for free cooking classes in your area: your local WIC may have opportunities, and county services as well as volunteer chefs offer classes to low-income families.
You can always make the trip to your local public library, too, or check out Youtube for simple, easy-to-follow instructions for making tasty meals.
For homeless individuals, the issue is not necessarily a lack of knowledge around healthy eating, but rather a lack of access. MoneyGeek’s Homeless and Low-Income Student Resources Guide has some tips for getting regular meals without a reliable place to cook.
Maybe you have a colleague or two who live in your part of town, or maybe your kids have a friend from school in the neighborhood. Whether it’s for you or your kids, there is no shame in arranging for carpool. You slice your commute-related gas expenses in half and potentially eliminate unnecessary impulse buys that can happen on a car trip.…and Programs to Help Low-Income People Buy Cars
Working Cars for Working Families has a “Find a Program” database where low-income families can search for car ownership programs in their area. Charitable donations allow families to obtain a used or potentially new vehicle. There are also programs that offer low-interest car loans to low-income families. Consult this state-by-state database for a comprehensive list of car ownership programs.…or Make Your Commute Car-Optional
Living close to work and/or public transportation can eliminate or lower car expenses from insurance to maintenance to gas (not to mention your carbon footprint). If you live in a temperate climate, consider investing in a bicycle. Many cities have bike collectives, where you can get a refurbished bicycle for a small fee, or for free. Use this bike collectives database to find out where you can get a cheap or free bicycle worldwide. It never hurts to check out Craigslist’s “Free” section, either.Ask About Workplace Subsidies for Public Transportation
The IRS allows employers to pay for employees’ commuting costs on busses, ferries or trains, as long as the costs are within set monthly limits. Here’s how it works: employees first elect to deduct a certain amount from their pre-tax income and submit proof of transit for reimbursement. In recent years, even bicycle commuters have been able to receive reimbursement for commuter costs.SLook into Free or Low-cost Van Pick-Ups for Seniors and Disabled Individuals
Free van pick-ups for seniors (to and from the grocery store, doctor’s office and the like) may be available from faith-based or other non-profits in your area. These non-profits are typically staffed by volunteer drivers. Reservations may be required and there may be some (minimal) cost. You can search for rides in your zipcode here.
Scholarships, Grants and Financial Aid
Just thinking about the costs associated with higher education—whether it’s for you, a spouse or a child—can be overwhelming enough to squash dreams of college. Don’t give up: there are ways of financing a college education that won’t leave you drowning in debt. Some scholarships are specifically aimed at individuals from low-income backgrounds. For example, low-income college students are eligible for Pell Grants and low-income student loans.
Check out the Free Application for Federal Student Aid (FAFSA) the January before school starts to find out how much aid you may be eligible to receive.
MoneyGeek.com’s Guide for Homeless and Low Income College Students provides a checklist for individuals experiencing homelessness for how to claim their homeless status on their FAFSA applications. The guide is full of tips for college students with very limited resources, whether homeless or low income.
Investigate scholarship programs. Some are income-based; some are merit-based. The Federal Scholarships page provides answers to frequently asked questions regarding Federal scholarships, including a link to the Department of Labor’s scholarship search tool.
The Rankin Foundation scholarship program is specifically for low-income women 35 and older pursuing a first bachelor’s or technical college degree or enrolling in a post-secondary diploma program.
Ask your employer if they can help. Working adults interested in going to college should check to see if their employer offers tuition reimbursement. You may have to maintain a certain GPA to qualify.
Consider community college and online college options. Community colleges are frequently a more affordable option for low income earners. Check out this list of the most affordable, quality online colleges for 2015-2016. With online college, you not only save on the cost of tuition and transportation, you may also be keep your regular job while you attend class.
If you belong to a minority group and have at least a 3.3 grade point average in high school, consider applying for a Gates Millenium Scholarship, which annually sends 1,000 low-income minority students to college on a full scholarship.
English as a Second Language (ESL) learners considering going to school can check with their local community and technical college, which generally offers low-cost classes. Public libraries can also be a good resource, as can social service agencies in your area that serve new immigrants. To find classes and resources, check out the ESL resources on GCF LearnFree and this Open Education Database laundry list of ESL resources.
Are you making the most of your tax benefits? Run through this checklist to make sure.Adoption Credit
If you have adopted a child, you’re eligible for a substantial tax break. For many low-income families, this benefit has made adoption possible.American Opportunity Tax Credit
This credit provides a tax break for individuals who are enrolled at least half-time in a four-year college and who meet certain income requirements.Childcare Tax Credit
Generally, families have to pay a portion of child care costs, not unlike co-pays for medical insurance. But the IRS provides a credit for child care expenses. You can learn about it here.Earned Income Tax Credit
Don’t miss out on this benefit for low-income earners. The amount of the credit varies, depending on your family composition (individual, married, head of household) and income.Health Coverage Tax Credit
For qualifying individuals, this IRS tax credit pays for 72.5 percent of their health insurance premiums (as long as those health insurance plans are also qualifying plans). If you’re wondering whether you qualify, call the IRS at (800)-829-1040.Lifetime Learning Credit
This tax break is—which may be as high as $2,000 per individual— available to those pursuing post-secondary education.Mortgage Interest Tax Credit
If you own your home, you may be able to deduct the interest you pay on your mortgage loan from your annual taxable income.Residential Energy Efficient Property Credit
A 30 percent credit for purchase of qualifying solar electric systems and water heaters, fuel cell property, small wind energy property and geothermal heat pumps during a given tax year.Savers Tax Credit
If you make eligible contributions to a qualifying retirement savings account, you may be able to deduct from your taxes if you meet certain requirements.Bonus: Get Your Taxes Filed For Free
Save when you file taxes. If you make less than $54,000 annually or have a disability, you may qualify for free tax preparation by VITA (Volunteer Income Tax Assistance).
Didn’t Find What You Were Looking For? This government resource allows you to fill in your personal information; benefits are suggested based on your specific circumstances.
Save More, Struggle Less
When you’re barely making ends meet, saving can be the furthest thing from your mind. But even a modest cushion can help protect you from catastrophe.
Three Steps towards Your Savings Fund
Have everyone who spends money in your household track their expenses for a week or other agreed-upon time period. If this is just you, make sure to write this down daily to stay accountable.
Schedule a family meeting (or carve out time for yourself at the end of the week) and identify where you can cut costs, like making dinner instead of ordering in or carpooling for errands rather than using two cars. Make a regular time for this meeting.
Use the extra money to open a savings account that can be used for emergencies or special events.
Regular family meetings to discuss expenses and expenditures can be a great way to discuss and plan for expenses that might be coming down the pike, like holidays. It’s also a great way to teach kids about money and finance.
Low-income earners with high goals can maximize savings by opening an Individual Development Account, if eligible. These accounts are generally restricted to savings for education, small business expenses or down payments on a home. These may be matched dollar-for-dollar, sometimes up to $3 for every $1 you deposit. At the end of a given term, the money is yours. Check into any requirements for income, earnings, net worth and credit history.
If big ticket savings aren’t on your agenda, you can still improve your finances by sacrificing one of your extras every week, even if it’s a small thing like getting take-out food for lunch at work, and put the money you would have spent into a savings jar. If you can do reliably every week, putting aside, let’s say, $20 a week, you have nearly $1,000 at the end of the year to sock away in an IRA or a savings account.
We interviewed two experts: Julie Kerksick of the Working Our Way Out of Poverty Project in Milwaukee and John Noonan of Evergreen Real Estate Services in Chicago. Kerksick and Noonan offer insights about the particular challenges of low-income earners and recommend resources and best practices for low-income earners, drawn from their own experiences.
What are the biggest challenges low-income earners face?
It’s important to talk about crisis and non-crisis situations. Things that are blips on the radar for middle-class families are catastrophes for low-income earners. There are lots of people who float in and out of low-income status, and that is crisis-driven. For example, I have just enough money in my paycheck to pay my rent, and then I get into a car accident and my car is no longer viable. I need the car to get to work to pay rent.
Also, for many low-income earners, their income is erratic or seasonal. And many have continually changing work hours, which means it’s hard to establish routines with children. My next-door neighbors’ house caught fire recently. No one was hurt, and the house is salvageable, but they didn’t have renter’s insurance. Life is full of crises and emergencies, and when there’s no financial cushion, it’s devastating.
What resources can people tap?
There are resources to help people in that situation, so knowing about those resources helps. There are agencies that can provide short-term emergency assistance, particularly to families with children. There’s a program called Emergency Assistance that you can get on a one-time basis. Obviously the Red Cross provides assistance in case of a fire or natural disaster. Solutions differ based on the nature of the crisis. If people are part of a religious congregation, that’s often a source of help. And I think it’s always worth calling municipal governments to see if there are programs you’re not aware of.
What have you learned through your work with low-income earners?
People who live on very low incomes are very resourceful about figuring out how to keep the wolf away from the door. Subsidized housing is absolutely a top resource, but it’s only available to a sliver of people. So it’s important that they know it’s out there and that they sign up, but there’s generally a two- to four-year waiting period, so it’s not my idea of a broadly available solution.
Financial literacy instruction is good, if it starts with the reality that people in that situation are playing a shell game all of the time. It can’t be from the point of view of a person who has never known what it’s like to not have enough money to pay your electric bill or to have to choose between rent, food, utilities and other expenses. If you start from a reality-based perspective, you can build whatever solutions work for a person’s individual situation. If food insecurity is the problem, make sure you’re making the paperwork available for them to access free- and reduced-price lunches.
Another thing is to share meals with another family, or to grow your own food. Farmer’s markets are increasingly accepting SNAP benefits, and you can get better deals on food. Another way to save is by shopping at Goodwill and other thrift stores. Many have 50 percent off days. You can also look for estate and rummage sales. And these are not just peoples’ castoffs. You can find really good quality things. I furnished my house that way.
What should low-income earners know about credit and debt?
People make things so much worse because they know they’re in trouble, and instead of tackling it, they just ignore it. Just yesterday I heard a story on the radio about a man who incurred $1,500 in college debt 38 years before and the debt had grown to more than $5,000. The main thing is instead of saying, “I’m in trouble, help! What can I do?” they avoid it. The first thing someone in that situation should do is see if there’s a non-profit in their area that will help. Or go directly to the people you owe and say, “What can I do here?”
What kinds of saving strategies would you recommend for low-income earners?
I think having a goal of saving is really desirable for everybody, but one has to recognize that for some families, it’s not a realistic immediate goal. If you can save, say, by saving half of a large tax refund or the old-fashioned “put your change in a jar and let it grow,” those are little things that add up. But the biggest thing is not to save if you’re harming yourself. For example, if you’re saving and the result means you’re paying interest on a credit card, it doesn’t make sense. But if you’re able to put something aside because you truly can, then do it.
What were ways you saved or made ends meet when you were low income?
It was a very day-to-day existence with no real planning, and I saw no utility in planning because I was low income, so it just became a vicious circle. I grew up in a single-family home, and my mom was raising four kids on a temporary income, so I’ve always been bargain-oriented and not inclined to spend money frivolously. So mainly I just tried to make money last as long as possible without thinking about saving for the future or saving in any way that would make greater earning possible.
Did you take advantage of tax credits or any government funded programs?
I didn’t have enough income or planning skills for filing to even be a priority, and the times when I was looking at applying for food stamps, it seemed like there were too many steps. It was too much of a bother. Also, when I mentioned to my family that I was considering doing it, it was not well received.
What about saving?
Again, that struck me as one of those things other people did. People who have money save more. People who don’t have money, in my thinking then, don’t save it.
What turned things around for you?
It was a combination of things. It was having people who believed in me when I didn’t – and I could give you the names of those people who were pivotal during those periods of my life, who made me feel like “Maybe I’m not such a schlub after all!”
Now that you’re no longer low-income, but instead work to help other people who are, what would your present self tell your younger, low-income self if you could go back in time?
That the things I assumed were futile aren’t. That it’s possible to turn certain trends around. It’s imperative to begin and the time to begin that is now.
“The things I assumed were futile aren’t…It’s imperative to begin and the time to begin is now.”
You have worked with weatherization and affordable housing. What advice do you have for low-income earners about saving on energy expenses?
The best way to save money is to start when you’re looking for an apartment. If you’re looking in summertime, pay attention to the windows. See if this is a place that’s going to cost you a fortune to heat. In my former job, I constantly used to hear from people in the middle of winter looking to move because of leaky windows and high ceilings and an apartment that was too big to heat.
Another is a programmable thermostat. It’s one of the best investments you can make. Even if you rent, it’s a good idea. They’re so inexpensive now and the installation is something most landlords won’t object to. I also know that Illinois offers tremendous savings at regular retailers to get people to switch from florescent lighting to LED. That can save a lot of money.
There are also a lot of things available in programs through utilities. They’re required to provide assistance with energy-saving technologies because it helps reduce demand, and every dollar invested in demand reduction is many dollars saved in construction of new facilities.