How often you encounter financial problems as an employee minimum wage? This article will tell you how to manage money for the employee with minimum wage.


Manage Money for Employee

Have you ever been in the situation of having minus income at the end of the month, without any money to save?

Or your expenses are greater than the money you make, then you feel surprised that the money runs out fast?

If you face some of these situations, you might want to check again how did you manage your money.

Because no matter how much money people make, especially as an employee, managing money is a precondition to stable cash flow and reach financial goals. 

Usually, employees receive salary only once in a month, early or at the end of the month (usually on the day of 25th).

Just imagine if you make a minimum salary and you need to pay for bills such as transportation and meals every day, you could wind up overspending more than the money you earn. 

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The question is how to pay off 30 days bills while building your wealth if you only receive minimum wage once in a month? 

The answer is by creating the financial surplus condition, which is to make income greater than your spending. Or to make your expenses lesser than your income. 

After reading this article, you’ll know how to create a financial surplus and be able to do that.

Finansialku provides a practical guide to managing money, you can download the ebook for free here.


How to Manage Money for An Employee with Minimum Wage 

The strategy creating a condition of the financial surplus is by filling the leaking bucket. It will help you not only to meet your daily expenses but also to help you to build your wealth. 

You mustn’t want the money you earn with hard work to run out without being able to save and invest, right?

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Imagine that in front of you there is a leaking bucket. How do you fill with water until it is full? Do you fix the leaking or do you add more faucet?

To be able to fill the leaking bucket, you should do both, repairing the leaking and adding faucets.

This is an example that describes the bucket as your bank account you need to fill to build your wealth.


So, How to Add Up Money to Your Bank Account? 

Let’s head on to the following explanation on how to fix the leaking bucket. 


#1 Make money

In Indonesia, the minimum wage is known as UMR (minimum regional wage). Its goal is to meet your primary needs as an employee. Therefore, if you want to be rich, you need to work harder. 

There are two ways to increase your income. By adding streams of income, and adding value to your job through skill, professionalism, and attitude at work.  


#2 Keep the money

Even though you make minimum wage, you can start gaining a surplus at the end of the month, and growing your wealth gradually, if you apply these following ways on managing your money. 


#1 Create a budget

The first thing you should do is to give a limit on monthly spending, based on your budget. It keeps you from spending more than what you’ve set in the budget.

It should cover your primary needs monthly, such as groceries, meals, transportation, and housing.’

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Try this popular portion of budgeting 50/30/20 budget where 50% of your income goes to after-tax income on necessities, a maximum of 30% on saving, investment and debt repayment. And a maximum of 20% on wants. 


#2 Record daily spending

The next step you can do is to write down your bills every day.

At the end of the month, you’ll be able to identify minor spendings and know if the expenses are beyond the budget. 

Therefore, even when you earn a lot of money, you still need to make a budget and record daily expenses, to control your cash flow. 


#3 Pay down consumptive debt

Focus on paying down consumptive debts first can help to fix the leaking bucket. How much is your monthly installment this month? How much is the ratio compared to your income?

Ideally, you can use equal to or a maximum of 35% of the income to pay the installment. 

Do you want to get out of debt faster? One of the ways is to pay more than the monthly installment.

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By paying down your bill more, chances are you’ll save on the interest during the period of the loan.

As inflation each year will reduce the value of your money, the sooner you pay the bill, the better for the cash flow. It’ll give you more chances to pay off other bills even to save and invest more. 


#4 Stop adding new debt

Try as much as possible to not add another debt. Why? Because your capability to trim down your bills will decrease, especially if you already have many credit cards with high interest.

It is a recipe for a crisis in your finance, particularly with minimum wage. You’ll make the cash flow vulnerable. Indeed, this part takes more discipline. 


#5 Having insurance 

Having insurance will protect your money from financial loss or unpredictable events. If you are already married, you should have life insurance, health insurance, and insurance for serious illness.

But if you are still single, you need to have health insurance and insurance for serious illness.  


#6 Emergency fund

Have you ever been in an emergency that forced you to borrow money from a relative or friend? If that happened to you, it means you haven’t prepared for an emergency fund. 

 It functions to help in urgent situations such as accidents, health problems, sudden loss, or recessions.

In a time like this day, the Corona pandemic has triggered people to panic buying. Many institutions are closed for several weeks.

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In such a situation, it would be difficult to live without any cash. Therefore prepare for cash. 

The ideal amount of emergency fund is a total of 6 to 12 months of your monthly income for a single, and 9 months for a married couple. 

Save the money in a place that is safe, liquid, and can be converted into cash quickly. You can choose saving, deposit, mutual fund in the capital market, or gold.

The purpose of these investment products is to keep the liquidity in the short term period, rather than to increase your wealth. 


#7 Add income

To maintain stable cash, you need to have income that latter be channeled through saving, investment, emergency fund, or other pockets, according to your financial goals.

You can focus on your current job while actively making passive or other active income streams. The purpose is so that you can fill up your savings and investment, and grow your wealth. 


#8 Accelerate wealth grow

But the effort is not complete yet. To gain a financial surplus, you need to accelerate your money growth. Investment is a great instrument to help you do that. The goal is to create a surplus from the minimum wage you make. 

Two purposes of investment are capital gain (return), and cash flow. Capital gain is the profit you receive from buying an asset at a low price and selling it later when the price is rising.

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While cash flow is aimed at fulfilling your monthly flow of cash. 

Which one fits best for your financial goals? Because you make minimum wage, the best option is to invest in assets that give income monthly, every 3 or 6 months, or annually.

The investment product of this type is a dividend-paying stock, P2P lending, bond, or renting.  



Having a financial surplus from a minimum wage is not a dream. By applying these strategies, you can gain surplus and grow your wealth in the long run. 

You can use Finansialku app to track your monthly spendings. Download the app in the link below!

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This video about financial planning would hopefully help you to manage money!


After reading this article you can take one of the practical steps to help reach your financial goals.

Tag also other people who might need this information.


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