The Two Income Trap? Doh!

Tonight in Barnes & Noble I picked up the book The Two Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke. I only got through the first few chapters, but it was eye-opening reading.

Every year more people file for bankrupcy than have heart attacks, get divorced, or graduate from college. It’s amazing that we mobilize around tragedies like divorce or heart attacks, but we don’t mobilize to help families in financial trouble.

The premise of the book is that two income families with children are more susceptible to financial ruin than single income families or two income families with no children. Not exactly an encouraging fact for this two income family that would like to have kids some day. I only got through the first few chapters, but it seems the primary reason for this is because that second income is becoming less and less about providing for extras and more and more about securing the elusive home in a good neighborhood with good schools. More than over-spending or affluent living, the search for safe neighborhoods and safe schools has caused two-income families to leverage that second income on a mortgage, removing the safety net and inviting financial ruin in times of crisis.

I’ll have to go back to Barnes & Noble to keep reading the book (or just break down and buy it), but it was a fascinating read. Basically the thought of getting ahead and sending a second parent into the workforce put more and more families behind. Part of it is keeping up with the Jones’, but much of it has to do with over-reaching to provide basic needs for children.

It’s kind of sobering. We’re a two income family, but mainly to stave off school debt. While our financial crisis has been difficult, we’ve been able to survive on one income and unemployment. That can’t continue forever, but it’s kind of scary to be riding that financial edge with a minimal safety net.

I’m also so surprised that very little of it has to do with affluent living. While we do buy more clothes, appliances, and goodies today, most of those goods have gotten cheaper, so everything balances out. We buy more appliances like dishwashers and dryers, but they cost less and last longer. We eat out more, but we spend less on groceries by buying in bulk and buying off-brands. Apparently it’s not all Affluenza.

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