The Two-Income Trap-- A terrifying bedtime read

I've been reading The Two-Income Trap: Why Middle-Class Parents are Going Broke by Elizabeth Warren and her daughter Amelia Warren Tyagi. Talk about a terrifying bedtime read. Yikes.

It's a fascinating yet disturbing read that includes an interesting discussion about how the education and housing crises are intertwined. Seeking out the best schools and living in those school districts helped to push people into homes (and mortgages) they could barely afford and when something happened-- job loss, illness, divorce-- financial ruin became imminent. There was also significant discussion of the fact that middle-class parents are worse off now than they were a generation ago, even with more mothers in the workforce. This didn't make much sense until I thought about the next takeaway point.

The most important and applicable point for me is the safety net provided by stay-at-home mothers.

From Warren's The Two-Income Trap (p 67 of Nook version):
"A mother who has gone into the workplace brings home a paycheck, but she forfeits the economic value of her backup role. So long as nothing goes wrong, the tradeoff is a simple choice between two viable alternatives. Some families prefer to have Mom at home and are willing to live with less money; others accommodate a working mother and enjoy a richer lifestyle. When trouble strikes, however, the family learns that the two choices may not have been as equivalent as they had seemed. Only one leaves the family with a safety net."

Previously, I had considered my decision to stay at home with our children as more of a liability to our family. From a strictly financial perspective, I'm not earning income and I'm likely actually decreasing my maximum earning potential for the future by sitting out of the workplace for so long. My retirement contributions are not as much as they would be if I were working (though we are still putting away more than 10% of J-bird's salary) and our savings goals tend to stagnate from time to time.

But as Warren points out, I am providing a safety net for my family as I'm a backup earner. Since I'm not earning and we're not relying on my income, any new income that I could bring in during a time of need would be a new infusion of income. Even if J-bird were to lose his job (ACK!), any new income I could bring in plus savings we have and unemployment benefits, though meager, could keep us from losing our home, etc.

Additionally, I am a backup caregiver. That means more than just caring for children day in and day out. That means caring for parents and grandparents when they have surgery, illness, or just as they age. That means caring for J-bird when he is hospitalized or has surgery.

I'd really never thought of being a stay-at-home mother as providing an important safety net for my family. Reading this portion of Warren's book actually made me feel better financially about my decision to become a stay-at-home mother. Quite a bit better. While I could return to work and save every cent I make (something that we hope to make happen when the children go to school), it is just as likely that lifestyle creep will occur and we will just start spending more.

For now, I'm happy with my role in our family as housewife / stay-at-home mom / CFO / master of chaos, but I'm glad that, with Warren's help, I was able to reevaluate my financial role in our family and see more financial value in my decision.


(Post contains affiliate links, all opinions are my own.)