Log in

Previous 10

Nov. 17th, 2015

Living on Minimum Wage

Sometimes Getting Your Finances in Order Does Mean Fewer Lattees

At some point, I may seek out Suze Orman’s “Young, Broke, and Fabulous” and do a proper book review, but when I read the back cover a few years ago, the summary turned me off rather strongly.  One thing I felt was an outright lie was the book claiming that getting your finances in order didn’t mean fewer lattees, because sometimes that’s exactly what it means.

But before you think I’m just randomly picking on Suze Orman again, this is really a self check.  I have not been very thrifty this summer.  To a degree this is okay.  I took on a part time job, which has given me some extra cash and allowed me to make a lot of purchases that I had been holding off on for the past few years (I’ve been making significantly less than minimumwage).  Some were altruistic; I filled four shoe boxes with gifts for Operation Christmas and bought my brother a couple pieces of furniture.  Some were practical; I bought new shoes and a couple outfits for interviews.  Some were bucket list splurges; restaurants I wanted to try, places to go (Dollywood and that big pyramid in Memphis), and I bought a hamster (which I’ll cover in more detail in another post).  And some of it was a lot little splurges, eating out with the nephew and/or friends, buying snacks, sodas, and knick knacks, etc.

My spending spree was not a complete loss of reason.  I made a list and prioritized it.  I bargain hunted.  One of the furniture pieces was a large display cabinet I found for less than $20 at a thrift store.  I got the new clothes off Goodwill’s dollar rack.  We used a coupon for the Dollywood admission.  And the stop in Memphis was part of a business trip.

But I have hit a point where I realized I’ve been spending too much and need to reel in the spending and focus more on savings.  I don’t have any guilt about my bigger, planned purchases.  They were things that significantly improved my life or someone else’s.  But I regret letting my spending on small items start to build.

Lattees specifically aren’t my weakness.  But sodas and snacks, little after school dates with my nephew and the occasional restaurant, individually were not big purchases, but they were adding up and burning through money that should have been directed to my savings account.  I am going to use lattees as an example of how these little purchases can eat through your income.

Let’s say your lattee of choice is a $4 drink at your favorite coffee shop.  You could probably duplicate a similar drink at home for 50 cents, so let’s look at the price difference over time.

Cost Per Year 5 per week 2 per week 1 per week 1 per month
$4 Dollar Lattee $1040 $416 $208 $48
$0.50 Home Version $130 $52 $26 $6
Skip it $0 $0 $0 $0

As you can see cutting back or finding a cheaper substitute can make a huge difference in your spending and saving power.

And I know I've done some similar examples in previous blog post, but it helps me to see it like this and be reminded.  I hope it helps you too.

P.S. If you'd like to support my new creative project I'm editing, check out the Tomato Slices facebook page.

Nov. 11th, 2015

Living on Minimum Wage

Go Easy on Caffeine, and It's now time to Enroll at Healthcare.gov

My grand plans for steady blogging have yet to pan out, but we took my brother to the ER this past weekend so I felt like talking about a health issue.

First off, it's good to have insurance.  If you don't, head over to https://www.healthcare.gov/ and see if you qualify for an insurance subsidy.  The Open Enrollment and Reenrollment deadline is December 15th, but I recommend enrolling this month and avoid the site crashes that may happen in December.

Second, please take some time to educate yourself about caffeine, both about the general symptoms and conflicts it may have with certain conditions and about how much you're taking in with particular drinks.

My brother is ok now, but he went to the ER with a heart rate almost double what his resting heart rate should be.  Combined with other symptoms, dehydration was probably his main problem, but that was likely kicked off by too much caffeine and too little of other fluids.  Caffeine can contribute to dehydration (as can sugar which is another part of your diet to track).

Caffeine is not all bad.  In moderate doses (like the natural amount in tea) it may have health benefits.  However it may also aggravate certain medical and psychological conditions.  For me (and others I've known), it brings relief to my bouts of depression, but for someone with anxiety or bipolar, it could make their symptoms worse.

WebMD has a good over view of safe verses unsafe caffeine uses, and that may help you recognize potential side effects and make the personal decision as to whether or not you should cut back.  Or at least how to balance your caffeinated beverages with other fluids like water, milk, and juice to avoid dehydration.


I wish the FDA required caffeine milligrams to be listed on beverage bottles along with calories and sodium, but there are websites where you can look up your drink's caffeine content.  For example:


My brother didn't realize that by changing Mt. Dew flavors he was drinking more caffeine.  For a regular 12oz Mt. Dew has 54mg, Berry Lime Game Fuel has 68mg, and the Game Fuel Citrus Cherry flavor has 73mg.   All of those are still less than a cup of coffee, so I'm not trying to sound too dire, but knowing these numbers can help you decide how to space out your drinks.  I don't think caffeine alone caused his symptom, but combined with sugar and not enough fluid in the rest of his diet made him feel pretty icky.  Based on his symptoms, the doctor asked if he had drunk 6 energy drinks one after another, but my bro wasn't that excessive, more like 1 or 2 per day over a series of days.  But it was more than he was used to.

Redbull may have 80mg or 114mg depending on the flavor.  Kickstart has 92mg per 16oz can.  Energy shots are popular at the store where I've been working, but they're more dangerous because the caffeine is concentrated.  For example,

5 Hour Energy has 200mg of caffeine

10 Hour Time Release Energy Shot made by Eternal Energy has 422mg

Chameleon Cold Brew Coffee has 2160mg per 32oz bottle... so if you follow their 4oz recommended serving size, you'll probably be fine at 270mg per serving, but it's not a bottle to chug down one in a single sitting.

Jun. 29th, 2015

Living on Minimum Wage

20 Top Food Picks at Dollar Tree

I had attempted to get back into the habit of regular blogging, even set up a schedule for the year and mapped out a few topics. Then things got busy, and the blog got pushed to the side again. But I have been doing research and made head way on the 2nd Edition. On to the topic at hand…

The Dollar Tree (a store where everything is $1 or less) in our area opened a new larger store with a freezer section and expanded food selection. As a single, one of the things I like about shopping dollar stores is they often have smaller versions of many food items, which can be ideal for dorm rooms and tiny kitchens. While still not a source for fresh fruit and vegetables, I thought it might be helpful to point out some of the healthier options. So I took a few shots of what I consider to be healthier items with good bang for your buck.

1. Bread

This is a national brand and wheat bread is generally recommended over white. They also had Wonderbread and some other national brands. Not too bad for $1.

2. Cheese

You need to label read on this one. The sliced “cheese” was soy rather than milk based, but there was some real shredded cheese, string cheese, and crumbled feta in the cooler.

3. Eggs and Turkey Bacon

So only 8 eggs rather than a full dozen, but that’s more than enough for most singles. Eggs are very versatile and a good nutrient source. Turkey Bacon is not your leanest meat option, but fine on occasion.

4. Frozen vegetables

Fresh is better, but frozen is a close second. Mixed bags will probably given you a better range of nutrients, but there were single veggie bags too for picky eaters like me.

5. Frozen Fish

My grocery store carried these single portion packs for a while, and I like them, eager to try these out. It’s a good size for one or two.  (Update: I've tried the Flounder and the Salmon and think this fish is excellent.)

6. Soups / Dumplings

This is my favorite type of Progresso, and $1 is a very good price for it. While you do need to keep your eye on the sodium level with canned goods, some sodium is necessary. So just balance out canned food with low sodium options. There’s some good protein to be had in these.

7. Canned Veggies

Many of the canned vegetables were 79 cents. While frozen is generally a better option, canned is acceptable when freezer storage isn’t available.

8. Baking Supplies

Having a few staples on hand like flour, oil, vinegar, sugar, salt, baking soda, lemon juice, etc. can help you create more meal variety. Go easy on the salt and sugar, but cooking your own food helps you have more direct control over what you eat.

9. Tea

Many herbal teas have supplemental or medicinal qualities, and they’re generally good low calorie options for when you’re tired of drinking plain water.

10. Guava Nectar

They had small bottles of Orange Juice as well, but you get more ounces with Guava Nectar. It’s high fiber and full of vitamin C.

11. Herbs and Spices

Most herbs and spices also have good nutritional value and can help improve the vitamin content as well as the taste of your meals and provide a good alternative to adding salt.

12. Oatmeal

Great for breakfast and making cookies.

13. Raisin Bran

The store had several cereal options, but this one seemed to have the best nutrition balance.

14. Boxed Milk / Soy Milk

In general boxed milk is as good for you as the refrigerated version. Basically the milk is boiled at a higher temperature which kills more pathogens and allows it to be stored at room temperature. It's more popular than refrigerated milk in many other countries.

15. Raisins and Apple Sauce

In the old days before processed sugar, fruit was often used to sweeten recipes. The store also had cranberries, dried pineapple, and banana chips. But the raisins are probably the best bang for your buck option with the least amount of iffy preservatives.

16. Brown Rice


17. Dried Beans

18. Egg Noodles / Pasta

Beans are good for you, lots of protein and fiber. While they shouldn’t be your entire diet rice and pasta can be a healthy part of it.

19. Tomato Sauce

Lots of varieties from plain to mushroom to meat flavored.

20. Canned Meats

Again, frozen is probably better for you and will get more mileage for your dollar, but canned meats work better in certain recipes.
Tags: ,

May. 20th, 2015

Living on Minimum Wage

Understanding the Emergency Fund Part II

In our last post on this topic, we tried to establish the idea that the emergency fund was a flexible, living thing to help you deal with emergencies.

In this post, we want to address the reasons for the 6 months living expenses goal.

One of the biggest and most common financial difficulties you may face is job loss. You certainly reduce your chance of job loss by being punctual, polite, productive, knowledgeable, and having other good work habits, but even the best employee may fall victim to bad bosses, company cut backs, or economic downturns. Six months is usually enough time to find new employment (particularly at the minimum wage level), but not always.

So why not 8 or 12 or 24 months?

Emergency fund money should take no more than 24-hours to access and allow for penalty free withdrawals. These kinds of accounts are readily available, but they don’t generally earn as much interest as other types of accounts and investments. But that’s okay. Emergency funds are about taking care of your immediate needs, not your long term ones.

If you are in a particularly unstable career field, like the arts, then a 12-month emergency fund is not a bad idea, and when the economy hit a rough patch Suze Orman recommended extending that 6-month fund to 8. When the economy is doing well, you may hear financial gurus recommend as little as 3 months. But it’s important to understand that this goal is not about a point at which you can stop saving, but about balancing your savings between short-term and long-term (liquid verses investment).

Or balancing between savings and debt reduction.

If you have debts and are ready to start paying them off, you need to strike a balance between taking care of the past and taking care of the present. Dave Ramsey’s debt snowball is a pretty good approach. He encourages setting up a smaller emergency fund to help you stabilize financially before attacking old debts full force.

Once the debt is managed and the present stabilized, then it’s time to balance between now and the future. As an example, let’s say your current living expenses are $1000 per month, so your Emergency fund goal is $6000.

Between overtime, thrift, and your tax refund, you eventually make your goal. Does this mean you should stop saving? Of course not. You have plans and goals and dreams, and you will some day reach an age where you need to stop or reduce working. The 6-month line is simply to let you know that you are now reasonably stable (the present is covered) and can divert your savings to other (future) goals. An excessive amount of money in your emergency fund isn’t the worse thing that could happen to you, but it may mean you are losing out on investment revenue.

It may also give you a distorted idea of your purchasing power.

A $20,000 emergency fund, when you only spend $1,000 per month, might mean you have $14,000 that could be better invested in a small home or education to increase your earning power. Or on a smaller scale, if you had a $10,000 emergency fund, it may be wiser to pay $3500 cash for a used car than to take out a loan to pay for it. Or an excess may mean that you can afford airfare to visit your mother.

On the bleaker side, if your unemployment lasts longer than six months, the emergency fund buys you time to liquidate other assets or make other changes to help you survive longer. It is fine to take unemployment or use food stamps and other available aids to help stretch your emergency fund out longer. That’s not cheating. Once you’re employed again, you will be paying back into the system.

Ultimately the 6-month Emergency Fund goal is about creating financial balance; not too little, not too much.

May. 13th, 2015

Living on Minimum Wage

Free Downloads

Sorry about that, didn't mean to go MIA for so long.  To make up for it, please enjoy a free download of Living Single on Minimum Wage (May 25th-29th).  If you read or have read, please review!  Your thoughts help other readers know if the book will be relevant to them.

The Living Single on Minimum Wage Facebook Page has posted a bunch of interesting articles. Please go like us (and feel free to like and share any of the articles that catch your eye) and share with any friends who might be interested.

Feb. 12th, 2015

Living on Minimum Wage

Tax Time and AFA enrollment reminder.

We’re now into February. This is the month we always encourage everyone to figure their taxes. You should be getting all your paperwork soon, if you haven’t already. Getting an early start means either an earlier refund or more time to budget if you owe money. If you owe, you don’t have to actually pay or file until April, but that extra planning and double check time can be very valuable.

Particularly with the new AFA changes this year, you will want extra time to make sure you’ve filled out the right forms.

Here’s a chart from the IRS to help explain which AFA forms apply to you.
(Most of them won’t.) http://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/Health-Care-Law-and-Your-Tax-Return

If you normally fill out the 1040EZ, it may be worth your while to fill out the full 1040 along with form 8962 this year, so you can claim the Premium Tax Credit. I used a company to Free File this year, which I'm particularly glad of after trying to read through the 8962 by myself.

You should go through the appropriate forms even if you didn’t make enough this year to be required to file. You may find you’re still eligible for a refund, and even a small one is better than nothing.

Reminder:Open enrollment through the Healthcare.gov market place has a February 15th deadline this year.

(If you don't have insurance, best to apply. If you have insurance, you don't need to worry about this deadline.)


Jan. 28th, 2015

Living on Minimum Wage

Home Buying Without a Credit Score...

Last year, I helped my brother (who for privacy purposes we’re going to call Mike on this blog) hunt for his first house. I felt this event worth documenting since until purchasing his home, Mike had never borrowed money and had no credit history. For the sake of brevity, we’re presenting this story in interview style.  I do not recommend most people on minimum wage run out to buy a house, but it may be a good time to start preparing for that long term potential.

Mike is a single man with no children just under the age of thirty.

Hi, Mike, would you mind telling us what you do for a living and how much you earn?

I’m a full time cashier at a grocery store. I usually work nights and afternoons. My hourly pay is $12.60 to $13.10 depending on my shift, which means I gross approximately $2193 each month.

How long have you been working there?

Twelve, close to thirteen years. I started as part time at minimum wage, and it took several years to get full time. The company I work for gives a small automatic raise every 9 months until we hit a top pay. I’m making the most I can get in my current position.

What made you decide to buy a house?

A mixture of things. My roommate was moving away, and with rising rents, it was going to cost me about as much to rent as to buy [monthly rent vs. mortgage payment]. I had saved up enough money for a down payment of $10,000 while still keeping enough for a sixth month emergency fund and covering closing costs.

I wanted a stable place to live, since I’d had to move frequently (every couple years or so) due to roommates coming and going. I also like the idea of the mortgage payment being a fixed amount while rent was likely to keep rising.

While this encouraged me to start looking, my dad’s offer to chip in $10,000 towards the down payment sealed my choice. With my own down payment, I was limited mainly to houses in the $80,000 range, and the larger down payment allowed me to look in the $100,000 range. In our area, this was difference between a massive project and move-in ready home.

Did you have any trouble getting a loan?

Yes, some places would not talk to me without a credit score.

Other places would allow me to establish an alternative credit history using utility payments. However, my water was included with my rent, my phone was part of a family plan (which made my line cheaper but the bill was not in my name), and the cable was in my roommate’s name. With just rent and electricity, I didn’t think I had the required three to four sources. Later we learned I could use my car insurance, which had we realized earlier would have saved a lot of time and headaches.

At one point, we tried to use my dad as a co-signer, but the rules have gotten strict. They would approve my dad but not me.

In the end, once I had my three sources for establishing an alternative credit history, I was able to get the loan on my own.

There was another big problem you ran into as well, wasn’t there?

The first house we made an offer on had electrical issues, and the bank would not give us a loan until the issue was resolved. We had some trouble getting the owner to comply, and the offer fell through.

There were several other houses that the bank wouldn’t approve because there were various degrees of structural issues, and not having credit meant my loan was more restrictive. This eliminated a lot of cheaper, fixer-upper properties as an option.

Do you think that might have been a blessing in disguise?

A little bit, yes. It forced me to be patient and find a move-in ready place that only needed a few minor repairs rather than investing thousands to make it livable. The place I bought also turned up in a far more convenient location than most of the others I had seen.

What worked in your favor when you applied for a loan?

Solid work history, good rental history, and no bad marks on my payment history. Also I had a sizable down payment. There are options for smaller down payments, but having 20% allowed me to qualify for a better loan with lower monthly payments.

How much house did you buy and what are your mortgage payments now?

I bought a three bedroom house for $100,000. With $20,000 down, it’s an $80,000 30-year loan. The monthly payment is $616.39, but that includes property taxes.

It’s important to note that the mortgage isn’t the only expense when owning a home. What are some other expenses you had while buying?

There was closing costs. Plus home inspection and termite inspection before the loan is approved. The inspections were about $300, and that’s not refundable. And then there were a number of fees involves with closing. It came out to nearly $2600.

Repairs are on me now instead of the landlord, there’s been a few dollars spent here and there on minor repairs. But nothing major yet.

Why get three bedrooms if there’s just one of you?

For location and room mate potential. I’m enjoying a few months of just me, but I’ll be looking for a room mate soon.

What advice would you have for other first time home buyers?

Make sure to have some bills in your name, even if you’re splitting the cost.

Try not to be in a rush and give yourself as much time as possible to look. The housing market is always changing. If you don’t like what’s available now, something may come open in a month or two.

Establishing credit isn’t something you can do at the last minute. I like not having debts outside my mortgage, but there were sometimes I wished I had a credit score to make the process easier. There were points where I considered getting a credit card, but it turns out I didn’t need it. I was able to get the loan anyway.

Be prepared to encounter unexpected obstacles. Sellers sometimes are emotionally attached to their houses, which can draw out the process.

Jan. 21st, 2015

Living on Minimum Wage

What are "good" money choices?

I'm going to pick on Linda Tirado author of Hand to Mouth: Living in Bootstrap America one last time before I move on. The article I'm referencing is an book excerpt on Slate, but I'll quote the part I want to focus on in this post.

"And let’s also talk about the ways in which money advice is geared only toward people who actually have money in the first place.

I once read a book for people in poverty, written by someone in the middle class, containing real-life tips for saving pennies and such. It’s all fantastic advice: buy in bulk, buy a lot when there’s a sale on, hand-wash everything you can, make sure you keep up on vehicle and indoor filter maintenance.

Of course, very little of it was actually practicable. Bulk buying in general is cheaper, but you have to have a lot of money to spend on stuff you don’t actually need yet. Hand-washing saves on the utilities, but nobody actually has time for that..."

- Linda Tirado, Hand to Mouth: Living in Bootstrap America

I actually agree with Linda that the lion's share of books on money and budgeting are written for the middle and upper class. That was our main motivation for writing Living Single on Minimum Wage. And even then our book is aimed towards singles without dependents which doesn't fully cover her situation.

What I found interesting were her examples of being "good" with money. These examples all have to do with domestic concerns and mainly capping the outflow of day to day expenses. If you're a full-time homemaker, then generally yes that is your domain. I've seen the value of a homemaker estimated between $70,000-$80,000 per year based on all the roles they serve for the family unit. So pinching pennies and doing things yourself certainly can add up.

But is that really the only way someone can be "good" with money? I don't think so. Let's break this down to a three-part answer.

A. The Most Important Financial Decisions Are Not Purely Financial. 

The most important and most impactful money choices you make are choices that may not always seems like financial choices as first glance. Do I try a cigarette? Who do I marry/move-in with/have sex with? Do I go to college or a vocational school? What car should I buy? Where do I want to live? When do I do or not do these things?

The #1 indicator of poverty for a woman is whether she has a child, and as states crackdown on child support, this is affecting the wallets of more men. Even though we grate at the idea of money being a factor in our love life, family, and personal decisions, it really should be. (Remember money issues are also the top reason given for divorce.)

Good decisions in these areas have the biggest impact on your finances within the realm of things you can control. (You aren't directly responsible for the general state of the economy or who your parents were. Those are just things you have to deal with.)

B. "Good" choices don't always have immediate results.

Some of the smartest things you can do financially do not show their full benefits immediately. Maintaining health insurance or car insurance may seem like a waste of money until you get sick or arrested for driving without it. Hopefully, you'll never need to use your emergency fund (though probability is good you will at some point). A retirement fund may feel like a hardship until you retire.

C. A "good" Financial Choice For One May Be "bad" For Another.

I've discussed Stockpiling Responsibly before. But it's a financial strategy that makes a lot more sense when you have a stable living situation and extra storage space. If you're short on space and particularly if you may need to pack up and move soon, then heavy stockpiling is more likely to lower your quality of life than raise it. At most you might take advantage of a two-for-one sale and keep your cash liquid to help stabilize your shelter.

Tirado dismisses "Hand-washing" because of the time factor. Which honestly in many cases is quite valid. During a period where you're working 60 hours a week and make $10/per hour, it does not make sense to work two or three hours less to spend hand washing and save $1 or even $5 on your utility bill. And it may be unwise to cut into your sleep or free schedule to do so. You'll see more savings from preparing your own meals. However if you suddenly find yourself unemployed or only working part time, the value of saving $1 or $5 increases. This isn't limited to hand washing but applies in other areas.


End Note: Any budgeting or money tip related book must be written broadly by it's nature as a mass publication. You should always feel free not to follow financial advice that doesn't work for your current situation. Some of it will become useful when you hit another stage of life armed with that knowledge, and some of it may never apply.

Jan. 14th, 2015

Living on Minimum Wage

The Financial Wisdom of Ebenezer Scrooge - Review

My co-author moved a couple months back, and while we were cleaning out his bookshelf, he gave me a few volumes to read. Among them was The Financial Wisdom of Ebenezer Scrooge by Ted Klontz Ph.D., Rick Kahler CFP, and Brad Kontz Psy. D.

I’ve been reading mainly fiction this past year, so it was nice to find a new addition for my recommended financial reading list. This is a short, easy read which would make a nice supplement to other financial reading. Instead of giving you specific advice about money, The Financial Wisdom of Ebenezer Scrooge uses Dickens’ classic to illustrate the deeply ingrained beliefs we have about money that don't help us and how to start recognizing and dealing with them. The authors call these “money scripts”.

As an example, the article I commented on last week seemed to contain a few money scripts that troubled me. Several are packed into this sentence "It is impossible to be good with money when you don’t have any." (-Linda Tirado, source)

There’s a lot of half-truths packed into that sentence. One article is certainly not enough for anyone to analyze the author, so consider this more a list of potential messages/money scripts that could be derived from the above statement.

Being ‘good’ with money is defined by how much you have.
My choices don’t matter.
Poverty was something done to me.
Poverty robs me of choice.
The system keeps me poor.
Poverty creates bad choices.
People with money can be good with it and therefore bear more responsibility.
People with money are different than me.

…and several variations on those themes. There are kernels of truth in these statements. Yes, if you’re good with money, you will keep more of what you get. Yes, often higher income helps and poverty can limit your options. Yes, poverty can happen through no fault of the person in it. And I do believe those who have more also have a bigger responsibility to help others. However as there are high income earners who make terrible decisions with their money, there are also low income earners who can and do make very good financial decisions.

The Financial Wisdom of Ebenezer Scrooge encourages you to rewrite these money scripts into something more useful through a process which involves looking back to understand where these beliefs about money come from, making efforts to see the present more clearly, and finally making a workable plan for the future.

For example, one might change the above scripts to more productive ones like:

Being ‘good’ with money is about doing the best with what I have.
I must take action to increase and stabilize my income.
My choices are important.
My situation is difficult but not hopeless.
I need to examine why I keep getting stuck in the same pattern.
I need to learn how the system can work for me.
I am not responsible for what is done to me, but I am responsible for what I do with it.
People with money are neither better nor worse than me. They simply have more money.

(Again, these are example scripts. I’m picking on a sentence that bothered me, not the person who wrote, because frankly, I don’t know them.)

What I find encouraging about this process is it works with nonfinancial issues too.

What this book won’t give you is much in the way of practical financial information, which is why I consider it a supplement. But it’s intended to be topic specific, so that’s fine. The authors lead seminars and work as financial planners, so towards the end there’s a bit of a pitch for their services. This was a 2006 release and repeatedly mentions a website with further information which no longer exists. Which is kind of a shame since unlike many other financial topics, this one has a very good shelf life and will continue to be valid regardless of the time period.

Jan. 5th, 2015

Living on Minimum Wage

Understanding the Emergency Fund

I read an excerpt from Hand to Mouth: Living in Bootstrap America on Slate that really bothered me. I'm not dismissing the book in general, because there are a lot of crummy things about working in food service industries that need to be fixed. What bothered me was the idea behind this sentence, "It is impossible to be good with money when you don’t have any."

It's true a budget is useless without income. But the article is not really talking about a case of no money, but not a lot of extra money.

There are degrees of poor. Sleeping on the park bench with a newspaper blanket or moving your family beside a dump so you can scavenge is what no money really looks like. Struggling to find food and shelter working a part time job at below minimum wage is not enough money. But if you have $5 spare dollars that isn't eaten by a need, you have barely enough money.

What you do with that $5 is important. Another quote:

"When I have a few extra dollars to spend, I can’t afford to think about next month—my present day situation is generally too tight to allow me that luxury."

Yes, you do have to make it through the present to deal with the future, but you've also used the word "extra". So for sake of argument, you have $5 spare for the week. Do you blow it on a non-necessity or do you recognize your financial vulnerability and hold onto the $5?

If you do the latter, you now have a $5 Emergency Fund. Let's say for the next 3-weeks you are able to put away $5 and so you have $20. Next week you get an unpatchable hole in your only work pants. New pants will cost you $20, and your Emergency Fund is back to $0.

Are you frustrated? Yes. Are you back where you started? Yes.
But are you still employed? Yes.

Now imagine, you've spent your $5 per week on a scented candle, a fast food burger, a beer, and a new CD. Not wild extravagances but things you could have lived without. Now, you have no work appropriate pants.

Do you still have job? (Depends on where you work, but showing up out of uniform for the next 4-weeks while you save, probably isn't helping your career, and taking out a payday loan is going to eat your $5 for several weeks to come until those pants cost you $40.)

But let's say you were a saver and still employed. Two weeks later you have employment, food, shelter, and another $10 in reserve, and your toaster breaks. There's a poor quality toaster on sale for $10. What do you do?

Save the $10. You can live without a toaster. It's not a necessity and not an emergency.

When we encourage you to save a 6-month Emergency Fund, we understand it's a process. The tighter you are, the longer it will take. The Emergency Fund is intended to be fluid, going up and down in response to your needs. A small one is better than nothing.

There are certainly things that happen which no one can plan for, but when you're poor (of the living paycheck to paycheck variety), you can't afford not to think about next month.

Previous 10