Chapter Three: Mom: The All-Purpose Safety Net

This chapter will explore how a two-income family gets into financial trouble. As an example, they show a couple at the beginning who had a baby with extremely poor health that needs constant care and medical expenses. However, when this couple had to file for bankruptcy, they had only paid $2000 in medical costs.

The authors begin to explore how little there is in the way of middle class safety nets since each family is responsible for their own safety nets. They argue directly against the common belief that two-income families are more equipped to handle financial difficulties. They show that if a family with one primary breadwinner undergoes economic stress (such as the breadwinner losing his job or sudden medical illness), the other member of the couple can enter the workforce and help cover costs until the hard times pass. They back this up with numerous statistics and anecdotes from Elizabeth's past. In addition, the stay-at-home member of the couple can provide free care for any family members that might need it.

Finally, the authors come to the meat of the problem. Single-income families plan their financial lives around that one paycheck. The stay-at-home spouse acts as a safety net in case something should ever go wrong. Dual income families often plan their lives around having that second paycheck. Rather than investing in unnecessary "stuff" that they can stop buying when times are bad, the two income family usually invests in giving their children better, safer lives. These payments for cars, houses, tuition, health insurance, and the like cannot simply be dropped in bad times. The two-income family has a much larger and much more serious shortfall to face in dire financial times. In addition, even if the second spouse finds a job again in a few months, the family still must find a way to pay back the debts they racked up during the unemployment period on top of their regular commitments.

One might wonder where this national financial crisis came from if it is truly this dire. The authors have an answer for that too. No experts during the time period when women entered the workforce were able to sit down and rationally work out the impact of women leaving the home. The battle between feminists and conservatives was too fierce for any middle ground to be left at the time. The families themselves do not notice the increased risk with all the extra money pouring in.

The authors do not suggest a solution as radical as forcing all women to return to their homes. Rather, they suggest that the government make programs that reward ALL savings done by middle class families, rather than the few specific savings the government gives tax exemptions to now. They recap the reasons why two-income families are actually more vulnerable to financial disaster at the end of the chapter.