Minimum Wage Up, Keep Credit Balances Down
Friday July 20, 2007
On July 24, the Federal minimum wage will increase to $5.85, a 9.3% increase over the current minimum wage. An individual working full time earning the new minimum wage, will earn approximately $12,618 annually.
After getting an increase in income, many people are compelled to spend more money. Be careful, though, that you don't increase your credit card usage. At that level of income, your "bad debt" payments shouldn't exceed $105 each month and payments for all debt shouldn't exceed $315. Anything over those amounts will put a strain on your monthly budget. I'd even argue that you should keep your debt levels at $0 to stay on the safe side.
Remember, bad debt is used to purchase items that go down in value as soon as you purchase or consume it, like clothes, good, cars, and vacation. Good debt is used to purchase items that tend to go up in value, like a home or an education.
For help making the most out of your monthly budget, visit About Frugal Living.
After getting an increase in income, many people are compelled to spend more money. Be careful, though, that you don't increase your credit card usage. At that level of income, your "bad debt" payments shouldn't exceed $105 each month and payments for all debt shouldn't exceed $315. Anything over those amounts will put a strain on your monthly budget. I'd even argue that you should keep your debt levels at $0 to stay on the safe side.
Remember, bad debt is used to purchase items that go down in value as soon as you purchase or consume it, like clothes, good, cars, and vacation. Good debt is used to purchase items that tend to go up in value, like a home or an education.
For help making the most out of your monthly budget, visit About Frugal Living.
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