Tuesday, July 18, 2023
Life Choices Are Resilience Choices: When One Income Is More Than Two
During the Great Recession I read an article about the economic resilience of families. I can’t find it, since I’ve slept several thousand nights since then. Heck, I’m not sure even Frequent Commentor Ricky could find it. The conclusion of the article was interesting to me – two-earner families were actually less economically resilient than sole-breadwinner families.
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To a degree I concur. Our household budget is based on dual income. Neither one of us could not replace the others income should it be lost.
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ReplyDeleteMy both parents were teens during the Depression. My Dad's father was a fireman and my mother's a mail man. Both grandmothers were homemakers and they got through the depression OK because there were no credit cards and no enticing adult toys to go into debt for. it was basic food, electricity and the mortgage first. Basically, my both parents learned and passed on to me the rule #1: "Don't buy something you can't afford or don't need because you'll either go crazy chasing your debt tail or have the goodies repoed".
Good message, but this guy doesn't know the meaning of "resilience". Or "efficiency".
ReplyDeleteBack in the early aughts we have two jobs, and were making enough money that we were paying three times normal in taxes, and were having to cut a large check every year. I convinced spouse we could live fine on my salary alone, with the only entity being hurt being the government tax feeders. She quit, and our finances were not hurt at all by the loss of the $30-40k she was making. Still left us with about $90k from me, but she was an accountant, and figured out how to slide. BTW: If you make over $70k (then) you jump into another much higher tax bracket. It's a good idea to check the brackets before accepting a raise, as you can actually go backwards.
ReplyDeleteHaha! I got a raise after I got my 1st real job out of school. The company gave a very slight adjustment to everyone about 2 months after I started. Kicked me from $74 to $75k or some such. I took a $40 / paycheck cut! Everyone I showed laughed at me! Back then, that want very funny to me! Lol!
ReplyDeleteA buddy's son has a stay at home wife and mother explained it to me like this
ReplyDeleteWhen his wife worked she needed several dressy outfits for work, extra makeup for work among other things, dry cleaning and makeup replacement costs were expensive.
They bought more fast and instant meals, needed 2 newer vehicles, had to have after-school care as well as day care for the little ones
Overall they payed much more in taxes, food costs, fuel costs, clothing costs and at the end of the month her pay was barely more than the costs of her working.
Now understand his wife is more of a traditional woman than a progressive one so she could see the reality of what was going on and agreed to make changes until the kids were old enough to take care of themselves then they would reevaluate their situation...
JD...
We have priced it out several times over the years, but the answer has always been the same. The jobs that my wife was looking to apply to would only result in about $100 a month extra income after the extra expenses. It just isn't worth the massive increase to our stress and the change in our lives. She might pick up some volunteering or some piecework once ALL the kids are in school later, just to change pace, but trying to fully rejoin the workforce just isn't wise right now. The overtime I can pick up when needed, with knowing that the three K's are all handled, makes far more difference than a second income with it's expenses.
DeleteDecades ago I sat with several couples and my wife, and went over our finances. In one case, it cost the family if dad worked, in the second mom's work contributed just over $100 in the entire year, and in the third, the second income broke even.
ReplyDeleteAs all these couples were just getting ready to start a family, one on the way, another plus up one.
You need to factor both jobs' income minus travel commute, fuel, vehicle maintenance and tires, parking, tolls, and insurance. Then there are suits or dresses, or other professional outfits, hair, makeup, shoes, etc. And, with child, you have to consider day care until pre-school, then after school day care costs, and the late fees of the adult being late. Counter all the financial costs against lost time with an infant, baby, young one's first words, first steps, etc., then lost connections between parent (usually mom) and child. Taxes for two incomes are another issue. For one couple, they were upset, angry actually, for calculating a year's work to average a "profit" of $100/year while have far less connection with their child. Another couple didn't ever bother to create a budget, were in financial hole, behind in credit cards, and had zero clue as to why; somewhat appreciated the number crunching to reveal it actually cost more for the two to work, than one stay home. Numbers, it's the facts.
I'm honored!
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