Page 42 - Book3E

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For middle-class families, the most important part of the safety net for generations has been the stay-at-home mom. Today’s wisdom holds that a couple that sends both spouses into the workforce is better off economically. They may be stressed out,
they may feel guilty about sending their kids to day care, and
they may have too little time for each other, but the one piece
of good news that the family can count on is that they are more financially secure... Stability and protection—delicious ideas for the modern family—and exactly what everyone knows a second income provides. But what if it doesn’t? What if the modern two-earner couple is actually more vulnerable than the traditional single-breadwinner family? (page 58)
The authors point out that while two-income families today certainly make more money than a one-income family did a generation ago, by the time they cover the basics—an average home, health insurance, a second car to get mom to work, child care, and taxes—the family actually has less money left over at the end of the month to show for it. It’s easy to think that with two incomes we’re doubly secure. However, if we come to rely on every penny from both of those incomes, which most families today do, we can expect trouble if either income disappears. Plus, having two people in the workforce doubles the chances that someone will get laid off or could become too sick to work. When this happens, two-income families encounter trouble, and it contributes to a lot of families going bankrupt.
Tips to Determine if You Can Live on One Income
The following tips will help you take stock of your current financial situation and enable you to make a more informed decision about leaving the workforce.
1. Determine the cost of working. As mentioned earlier, we frequently don’t pause to think about the costs of working outside the home. If you’re a mother looking to leave the workforce, add up all your work-related expenses: transportation (including gas and oil,
Downsizing from Two Incomes to One