Andy Hough

I’ve discussed this before in my post Saving on Minimum Wage which was included in The Great Money Challenge‘s post More on How to Live on Minimum Wage.  This post features several posts about minimum wage.  I highly recommend reading How to Get Wealthy on Minimum Wage  by Early Retirement Extreme.  I just started reading Early Retirement Extreme last week and it is one of my favorite blogs.  Through what some would consider extreme frugality he has managed to become financially independent in just five years.

You should also check out Multi-Millionaire Made on $11/hr Job at Consumerism Commentary.  This is more than minimum wage but still a very modest salary for becoming a millionaire.  All these posts show how frugality can help you get ahead while making a small income.  Of course if you’re making a modest wage you should also look into ways to increase your income.

I rarely drink wine myself but since many PF bloggers do I thought I would share the results of a couple of studies I recently read about.

In the first study wine tasters were served the same wine in a fancy bottle and an ordinary bottle.  The wine in the fancier bottle was rated much higher.   He also conducted a test where experts asked their impressions of a red and a white wine.  The red wine was actually the same as the white wine but tinted with food coloring.  None of the experts noticed it was a white wine.

In the other wine study volunteers were asked to rate their enjoyment of five wines.  Two sets of wine were identical but labeled differently.  The $5 and $45 wines were both the $5 actual price wine.  The $10 and $90 wines were both the $90 actual price wine. The fifth wine was identified by its actual $35 price.  The $90 wine was the favorite and the $5 was the least favorite.

Two weeks later they were asked to rate the wines without the price information.  They rated the $5 wine better than the $90 wine.  This shows how price can affect how people perceive wine and other things.

I guess the lesson from the studies is put your cheap wine in a fancy bottle and put an expensive price tag on it and you will enjoy it more.

Someone on a Yahoo group I belong to recently asked if it was possible to live on $1000 a month.  Since millions of people in the U.S. do live on this amount or less it is definitely possible.  Below is a sample budget of how I would live on $1000 a month.  I won’t be working during the months of February, March or April and plan to keep my expenses at $1000 a month or less for that time period.

The rent, health insurance, car insurance, and phone are all actual, fixed monthly totals.  The utilities amount is less than what I’m paying right now but it is well above what I’ll be paying in the summer.  My food expense isn’t fixed but it is usually right around $100.  The savings for irregular expenses covers car registration, maintenance, and any other predictable but irregular expenses. I purchase my health insurance through eHealthInsurance(Update: I now get my health insurance through Healthcare.gov) which has lots of relatively low cost plans available. My entertainment budget of $100 could easily be cut but I’ve been spending more than that lately.  The amount budgeted for gasoline is also probably too high since it should come down significantly now that I’m not working.  I threw in $30 for miscellaneous to cover any little expenses not covered by the previous categories.  This is a realistic budget for me and should be achievable for most people that live in an area with similar housing expenses.  You can look at my expenses for last April to compare how my actual expenses match up with this budget.

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