Yes, You Can Survive On An Entry-Level Salary

How to survive on an entry level salary

If you’re about to graduate from a post-secondary program in a few months, prepare yourself: the entry-level salary discussions are coming. 

Specifically, the ones where (hopefully!) an employer calls you up, tells you that you scored the job, congratulations and here’s your new salary. Personally, that happened to me in the middle of a tutorial, and I felt rude af leaving the room to answer my phone, but also incredibly grateful because they offered me more money than I ever thought I’d earn as a marketing grad.

$37,000. Canadian.

So obviously, I didn’t do any of the things I was supposed to do, like negotiate or ask for more. Nope, I said thank you as quickly as I could, and thanked my lucky stars for landing any job in a city not necessarily known for its marketing careers.

However, the year that followed was a crash course in how much money real life costs, and how to manage all of it on a decidedly entry-level salary. Since I lived to tell the tale, with no credit card debt and very few packs of ramen noodles, I know you can survive your entry-level salary too – as long as you’re smart about it.

If even one person reads this and avoids credit card debt or hunger in their new grad years, I’m a happy camper.

#1. Hustle is a good thing.

If there is one thing I wish someone had told me as they handed me my diploma, it’s

“You are not above taking a second job just because you landed a 9-to-5.”

Whether it’s a freelancing side hustle or a part-time retail gig, I can’t stress this enough: the extra money will make your entry-level life a lot easier.

You have the luxury of a steady paycheque that, if you plan it right, will cover your basic necessities. Give yourself a bit of leeway on how you want to earn that extra cash, but go earn it. I wish I had back then, beyond just signing up for overtime shifts when they were available because I needed new running shoes (true story.)

#2. Living at home is not a death sentence.

It’s not an option for everyone, but if your parents are being gracious enough to offer you below-market rent and a warm bed, there is no shame in taking it. It is a privilege to have family who are in the position to support you like that, and in the city you’re living in, to boot.

This is a real option. Not a punchline.

#3. If you need to put it on a credit card, you can’t afford it.

Feeling like you can’t afford the life you want is tough. It’s really, really tough. Like, burst-out-crying-because-you-ripped-your-one-pair-of-nice-jeans-and-can’t-afford-to-replace-them tough. I know from deeply personal experience, because that’s a real thing I did.

But you know what else is tough?

Having debt.

Especially the kind of debt that comes with a 20% interest rate and eats up hundreds of dollars, just to make a minimum payment.

If you find yourself thinking, as a new grad, that you want to buy something, but you don’t have the money?

Then you don’t have the money. Do not put it on a credit card and hope for the best. Because you still don’t have the money.

As hard as it may be at the time, if you can’t pay off that credit card at the end of the month, don’t buy it. Your future self will thank you so hard, all the time.

#4. Where and how you live matters as much as your salary.

Some places are more expensive than others.

This seems like it shouldn’t have to be said, but paying attention to this fact will make your entry-level life a lot easier. If entry-level salaries are, by and large, comparable between different cities, but one city’s average rent is through the roof? You’re going to have a harder time making your money stretch there.

I’m not saying don’t move there, or stay there.

I’m just saying be aware of the choice you’re making, and how much it will cost you.

Until expensive cities start paying new grads $75,000 a year for entry level roles in your field, you should consider this factor before moving to them.

And before you put the entire move on your credit card.

PS. This article, about a man who makes a six-figure base salary and “can’t afford” to live in Vancouver is my jam. Dude is wise, and makes the point that “No one has a God-given right to live in a particular place. We all have to tailor our expectations to our income.” Preach.

We all have to tailor our expectations to our income.

I’m going to cross-stitch that and put it on a freaking pillow.

#5. Don’t expect to be out of an entry-level role in a year.

Listen, a year is a pretty reasonable amount of time to do an entry-level role.

When I got out of school, I had no idea how much I still had to learn, and I relished every second I was paid to learn it. Trust me when I say that my on-the-job learning still hasn’t plateaued, and I don’t see that happening anytime soon.

If and when you’re expected to stay in a role for a year or more and learn the ropes before advancing, you should be grateful for the opportunity, and not bank on a $20,000 raise in the first six months.

If your salary over that year won’t support your life, see point #1, or reconsider whether the job is a good fit for where you are right now and the choices you have made. It might not be.

But don’t take it as an unreasonable situation.

It isn’t.

#6. When you get your salary offer, make a budget before you make big decisions.

Here’s a quick gut-check budget you should do on your first full-time salary offer. It’ll take you all of five minutes, tops.

Sure, the offer you just got might be more money than you’re making now by a factor of 10, because you’re still a student. You still absolutely need to check your expectations against the reality of the life after graduation, and this two-step budget check is a great way to do that.

First, go put your salary and location into the Simpletax tax calculator. It’ll give you a rough estimate of your yearly take-home pay, after taxes. Divide that by 12 for now, to estimate your monthly take-home pay.

Second, calculate a rough budget based on percentages of that take-home pay, like the ones in the One-Minute Budget, which advises

  • 30% of your income goes to housing
  • 10% goes to food
  • 15% to transportation
  • 10% to fun and life
  • 20% to savings
  • 15% to debt repayment

Let’s say your take-home pay is $2,000 a month (which is not that much less than what I earned post-grad). That gives you…

  • $600.00 for housing (this includes utilities, internet, rent, etc. This is not just rent.)
  • $200.00 for food (buying your own groceries is and always will be A+. I love food and I think you might too.)
  • $300.00 for transportation (this includes a bus pass, bicycle repairs, and anything you spend on a car. Spoiler alert: you might not be able to afford a car and a bus pass. Or a car payment and car insurance and gas.)
  • $200.00 for fun and life (That’s clothes, happy hour with your friends, technology, travel, pet care, hobbies, gym membership, etc. The great part? You can do whatever you want with this money. The downside? You probably can’t do everything you want. It’s still only $200.)
  • $400.00 for savings (at this point, save for what matters to you most, but keep reading for point #7 about emergency funds, please please please.)
  • $300.00 for debt repayment (if you have debt – if not, feel free to allocate this elsewhere. But try to send a bit of it to savings.)

Even if you tweak the categories, doing a quick calculation like this will help you make better decisions, like where you can afford to live and how you can maintain your ability to buy your own groceries.

Combining this budget with a tiny bit of research on the city you’ll be working in, and your options when it comes to things like rental apartments and transit passes, will give you a great guide about how affordable – or not – your choices are.

Because nothing says “I’m an adult” like buying your own groceries.

You want to be able to buy groceries. Trust me.

#7. You need an emergency fund. Even a tiny one.

In the above example, there’s $200 allocated to savings each month. If I were that new grad – and I was – I’d throw some of that money into an emergency fund. Not only will it make getting fired way better, it’ll give you peace of mind.

When you’re just starting out, there can be a lot of little emergencies, especially if you’re figuring out how to be in the world as an adult for the first time.

Which ok let’s be real, is all of us, and me to this day. Who knew you had to renew your license plate every year on your birthday? Adults, that’s who, and none of them ever told me about it.

Even if your emergency fund is teeny – like, $20 teeny – it might be the difference between paying the deductible on your medical benefits and getting the treatment you need, or suffering through something in silence.

Have a $20 emergency fund. Grow it from there.

But have one. You will not regret it.

Desirae is on a mission to demystify and un-boring financial info for millennials, so that we can all save more money, spend on stuff that matters to us, and still have a latte or two along the way. Money is literally why we can have nice things, and Desirae is committed to helping make sure you know just enough to make the right calls for you. (She’s also committed to her expensive dog, her side hustle, and her retirement fund.)

30 Comments on “Yes, You Can Survive On An Entry-Level Salary”

  1. Penny @ She Picks Up Pennies

    This post is so solid. Really valuable advice. I was really fortunate to land a teaching position right out of college at a time when there was a crazy job shortage (800 resumes submitted for the one spot I landed). I could have easily puffed out my chest and quit my part-time job (making $8/hour) at a local book shop. But I worked that job for almost two years while I taught. Then, tutoring took off for me, so I switched over to that. Even if you land your dream job, it’s silly to limit yourself to one income stream.

    1. Desirae

      Thank you Penny! Not going to lie, I was super-nervous to publish this, because it definitely lands me on one side of what’s a pretty divisive online conversation right now, lol, but honestly, I would tell anyone graduating to do exactly this. It’s how I avoided living above my means and made my entry-level experience work and I just don’t want to hear about other millennials starving because they can’t afford food! It’s too sad and entirely avoidable if they take a realistic look at the situation. Hopefully, anyways.

  2. Amanda @ My Life, I Guess

    I couldn’t help but think as I read this post that everything you say here isn’t limited to just “entry level jobs” – especially point #5. Being laid off has left me in the same position, and I’ve been out of school for nearly 8 years! It’s been over 2 years since I made $2,000 or more a month, and although I’ve relied heavily on my fiancé (financially, mentally, emotionally) we are getting by on a small income. A lot of what you said still applies to people in their 30s too!

    1. Desirae

      Thank you so much Amanda – I totally agree, and I am also so glad you had your fiance to rely on during this time! I’m so sorry you’ve been out of regular employment for that long too, but so impressed at how you’re handling it and your resilience. (I see your tweets about the job hunt and I give you mental high fives and/or hugs as appropriate every time!)

  3. Alyssa @ GenerationYRA

    Very great advice, and I think #4 is one of the most prominent on this list. Cost of living is huge – especially when you don’t weigh in what your actual salary/budget in afford. A lot of my graduating class from undergrad were captivated by moving to large cities were rent, transportation, groceries, utilities, etc. were outrageous. If you don’t have the mindset of what a starter salary (which typically, is way more than anyone has ever experienced in their life at that point sometimes!) can accommodate, or what you can maintain for fixed expenses – you suddenly find yourself flailing. I was very fortunate to opt out of that route and accept a position in a large city, with very low cost of living in comparison to the “big on the map cities.” Balance, tailoring, you name it. It’s all incredibly important when determining what is right for you! Sometimes it’s hard to accept that, maybe where you chose to begin your career can be effectively accomplished in another city as well. The question is: are you willing to make those choices, or stand still?

    1. Desirae

      Thank you Alyssa! I had the same phenomenon when my friends and I graduated, and a whole bunch of them have since moved back, not only for the lower cost of living but also for the reasonable pace of life – they found that big cities have earned their workaholic reputations in some cases! I was selfishly happy to welcome them back, and seeing the change it has made in their happiness and stress levels has been great too. It’s just one added benefit of maybe not needing to launch your career in the “centre of the world”, whatever that means in your area (for us it’s Toronto, haha, and Torontonians would tell you the same thing.)

  4. Alyssa

    I am legitimately writing a piece about “average salaries” right now. Obviously, because it’s quite timely. But you hit so many important things right on the nose. Especially the credit card pointer. I was the absolute worst when it came to organizing my finances, and ended up using credit for every single purchase because I didn’t want to take the time to get a budget set up. It was the largest downfall in my financial life, and I refuse to let it happen again. Great tips, Des!

    1. Desirae

      Thank you Alyssa – and I absolutely loved your post today about average salaries! Your advice lately has been SO on point <3 (And your GIF game is ridiculously strong, as usual.)

  5. Bianca

    Off topic: I don`t like the term “entry level salary”. It makes people by myself, who still don`t earn that much at age 41, feel a failure, because it suggests an expectation of consistent progress in that area.

    To some however, money is not the most important thing. And although my salary does not reflect this (I actually took cuts to move to, otherwise better, jobs), I feel I have progressed my career by collecting vast amounts of experience of both hard and soft skills in many different environments.

    1. Desirae

      That’s a wonderful point Bianca, and thank you for bringing it up – I have to admit I had never considered that perspective and I really appreciate you bringing it to my attention! You’re totally right, and I am so sorry if any of this felt like it invalidated your experience – I know for a fact there will be times in my career when factors other than salary will be the decision point for taking a job and you’re right that it’s not even close to the most important thing.

      1. Bianca

        Thank you for your kind reply Desirae. But it`s not your post that is wrong, it`s the word. In many careers, your salary will not increase that much over time, but by suggesting that they`re still earning an “entry level salary” at age 30 or 40 is suggesting that they haven`t achieved much.

        Given that the jobs with poor pay progression are usually low paid to start with (take hospitality), I think that`s really harmful for people`s job satisfaction and self esteem. This dinner lady may have been enjoying making cakes for loads of children every day, but suggesting that she`s still on an entry level salary at the age of 55 may make her question what on Earth she`s getting up for in the morning.

  6. Vic @ Dad Is Cheap

    Great post Des! I’ll definitely be sharing it!

    I wish I read something like this when I graduated. I was living way too free with the extra income and wasn’t very responsible with my money. I put stuff on credit cards, didn’t budget, and had no savings. I’d be in a lot better position today if I paid attention back then.

  7. AB

    I lived off non-profit “entry level” (sub-$30k) for 2 years in Toronto without the benefit of splitting most expenses with a partner. I had a car, $36k in student loans, and a dog to pay for and managed it. I didn’t side hustle – I didn’t have time due to my workload – and I used my credit card religiously (free groceries yo!) and paid it of every month.

    I’d say two things were key to my success: I did it by sacrificing my living arrangements – I didn’t lock myself into a lease that would leave me financially stretched and stressed, but lived with roommates, sometimes somewhat unconventionally (parents friends basement with limited privacy, small out building on someone’s property). It wasn’t ideal but it allowed me to float, financially, during those hard times. I managed to have enough saved to pay for a $5k emergency surgery for my dog, and then resave when those vet bills emptied my savings.

    I also did it by tracking every single penny I spent. I would suggest this to anyone in a heartbeat, especially if you’re stressed about making ends meet.

    Other details: I made so little that I qualified for the zero-payment interest relief program on my student loans. When I got a promotion and a small raise two years later, I started saving for the day my student loans would kick in with a super strict “loan first” budget.

    I lived (and still live) frugally. Tracking spending helps with that enormously. I bike everywhere year round, which is tricky but manageable when you have an office job to go to. I buy local and organic but cook from scratch and watch my waste and am not afraid of leftovers. I keep a close eye on how much I spend on eating out (a month long ban on eating out helped me adjust that expensive habit). The vacations I’ve taken were super frugal – overnight busses to NE American destinations with friends couches to crash on. I worked very, very hard not to succumb to the pressure of buying in style, and basically avoided malls for years to make that possible.

    The list of habits go on – all to say, it is possible!

    1. Desirae

      Wow, wow, wow – thank you so much for sharing this positive and powerful example! This is just totally awe-inspiring and I am so grateful you chose to share it. Thank you.

      It sounds like you have an absolutely amazing handle on your finances and you’ve built a life you love within them, which is wonderful, and what I think most of us are working towards! Also, I have to say, having a loan-first budget is like grand master levels of budget awesomeness. Colour me SO impressed, and again, so grateful you took the time to share this.

      1. AB

        You’re too kind! I really wasn’t a robot about it, haha. Lots of bumps and silly spending along the way (that continues to this day!). Acknowledging the debt was such a helpful first step, followed by tracking spending. And I’m so thankful for PF blogs like yours that help keep motivation up! Really – thank you!!

  8. Our Next Life

    I read this Thursday on a plane but didn’t have wifi at the time to reply! 🙂 Agree with every single one of your suggestions. And I’d add: Be smarter about your tax withholdings. I don’t know if that’s an issue in Canada, but in the U.S., when you start a job, you tell your payroll people how much to withhold. Based on the math from our friend’s Medium post, she was clearly having too much withheld, since she would owe very little in tax on that income. No reason to give an interest-free loan to the IRS, especially if you’re scraping by! It’s like all your other points — don’t just complain about the numbers, be smart about them! As for me, as an English major who found a great job right out of college that paid an actual salary (albeit not a big one), I still had a roommate! (I’ve only lived alone for, like, eight months of my whole life.) Oh, and that was after I left the Bay Area because it was too expensive even then compared to what the jobs I could get would pay — so, you know, rational people decide where to live based on cost of living and pay. 🙂

    1. Desirae

      Thank you so much – and yes, income tax withholding is a thing here too! I honestly hadn’t even considered that, but you’re so right: she wouldn’t have been paying that much tax at all, and that would have been one way to address the situation. Or at the very least give her a tiny bit of breathing room!

      But yes, even at the point in my career where I am totally lucky to be able to afford to have choices in front of me, there are some places that are just too bonkers expensive for me to even consider moving to for work long-term on almost any salary (or at all. I’m looking at you, Vancouver.)

  9. Sarah @ Smile & Conquer

    Great advice, especially about being at an entry level salary for more than year. Now that I’ve been out of school and working for a few years I do often wonder how the heck I survived on my first real salary, but I did it was able to without ever feeling really strapped.

  10. Lindsay @ the Notorious D.E.B.T.

    I would also add that you shouldn’t even really expect to get an entry-level role. I did everything right – I went to school, studied hard, got a master’s degree, never partied, did all the extracurriculars I could to beef up my resume, volunteered, and networked.

    When I graduated, I was so excited to finally start working. It was like bursting through the doors into the bright sunshine and the sound of…crickets.

    I hadn’t expected that I wouldn’t be able to get a job in my field. Instead, I’m working in a job which doesn’t even require any degree, let alone the ones I spent 10 years of my life and $55k getting.

    If someone had told me from the get-go that this might never happen for me despite all the blood, sweat, tears, and years I put in, I think it would have been much easier to deal with. So, moral of the story: even if you work hard for something, don’t feel like you’re entitled to it!

    1. Desirae

      PREACH. Oh my goodness Lindsay this is so true, and thank you so much for sharing your experiences. This is so much more common than anyone wants to say.

  11. Jen @ Frugal Millennial

    Excellent advice! I finished grad school with $75,000 of student loan debt and a temp job that paid $15/hour. Luckily, I have the option of living with my parents which I am doing for the next three years until my loans are paid off completely.

  12. Gail

    I really love this post! I’m currently living with my future in-laws and it’s been a huge money saver for my boyfriend and I. He’s almost done paying off his school loans (He had a staggering amount) at the age of 25, and I’m getting there too! It’s entirely possible to pay off the debt on entry level salaries if you put your debt repayment ahead of your lifestyle wants (Those can always come later =) )

    1. Desirae

      Hey Gail – so sorry for the delayed reply, I totally missed this but so appreciate you taking the time to comment! And kudos to you for making that choice – it’s not always the most fun to live with in-laws (future or otherwise!) but you’re totally right, it’s an awesome way to hit your goals.

  13. John

    I feel like making Point #1 “get a 2nd job, lol” rather undermines the thesis statement of the article. That’s not living off of an entry-level salary. That’s living off of two separate salaries.

    Living with your parents is also suspect, because I think that was the original idea the author is trying to debunk: It’s impossible to live [in your own place] on an entry-level salary. You can live off of a fucking part-time gig McDonald’s if you stay with your parents.

    I was briefly able to live off an entry-level *engineering* salary by living close enough to work that I didn’t need a car. I was living in a trendy neighborhood, but I found a good deal and the money I saved by being able to walk everywhere far outweighed the small savings on rent I could’ve made by living somewhere else. But if I wasn’t an engineer or I had to drive to work: hell no.

    1. Desirae

      Hey John,

      Thanks for the feedback! You raise some great points, but to clarify, I did both of those things (lived on my own and had only one job) when I was on an entry-level salary. I was trying to make the point that I wish I hadn’t thought I was above taking on additional work, because it would have made my life a lot easier, but the reality was that I was able to manage it all on one salary by doing a lot of the same things you did: living close to work in a “student” apartment with a roommate and forgoing a car. I just could have foregone some of the associated stress had I given up a few weekend days to pick up some additional work 😉

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