"The Two-Income Trap -- Why Middle-Class Mothers and Fathers are Going Broke," by Elizabeth Warren and Amelia Warren Tyagi, describes an escalating condition in American family finances:

“…the people who consistently rank in the worst financial trouble are united by one surprising characteristic. They are parents with children at home.”

Their research shows that the costs associated with raising kids-- good public schools (i.e. expensive homes in good neighborhoods), health insurance, day care, and college educations -- these daysREQUIRE two incomes.

Mom HAS to work.

Not only does she have to work, but working doesn't provide thefinancial buffer expected of an additional household income...

"Today, after an average two-income family makes it house payments, car payments, insurance payments, and child care payments, they have LESS money left over," than their single income counterparts of the early 1970's.

Historically, mom was a sort of financial safety net. If dadlost his job, mom could go to work to bridge this income gap.

Today, with debt-enabled high costs – large mortgages, extra car notes, workplace wardrobe --

“Mom's paycheck has been pumped directly into the basic costs of keeping the children in the middle class.“

Because there is no extra “woman power” to deploy in times of financial emergency, and there is no 6-month Rainy Day fund safety net, one laid off spouse can lead to bankruptcy. In fact,two working spouses doubles the odds of a layoff.

Fixed costs -- mortgages, car notes, credit card payments, healthinsurance, etc., requiring two incomes cannot be paid by one.

The trap is sprung!

Financial “experts”, and even the authors, suggest a way out of this trap: Replace the lack of a backup worker safety net with a budget and a 6-month Rainy Day fund.

Well... duh!

To be fair, the authors also suggest political changes to decrease demand for the resources that parents have come to believe are essential for successful kids. For example, they suggest vouchers as a way to decrease the competition for neighborhood-based good public schools... which drives up the prices for homes... which can only be acquired with gargantuan mortgages... which require two incomes... resulting in mom working just to make the mortgage payment.

Theoretically, vouchers would allow parents to choose a school independent of neighborhood and they can live wherever they canafford.

But, if they want a solution that is implementable BEFORE theirkids are grown, the authors say, "SAVE." And if the government can support saving, so much the better.

I'm sure you see the fallacy in this solution. I'm surprised, given the author's dedication to "analyzing the numbers," that they overlook both this fallacy and a more practical solution.

If two-income families are already spending every cent they maketo service their ongoing expenses, how will they create their Rainy Day fund?

What will they use for money?

And, if they think squeezing the family budget to collect a fewdrops of savings will create 6 TIMES THE TOTAL of all of theirmonthly expenses in any reasonable period of time, as has beenwidely recommended by financial "experts" since the Richest Manin Babylon was a baby, then why does practically NO ONE have this amount of cash available?

Do you?

Yet, if the authors were able to awaken themselves from theirmainstreet-induced hypnosis, and take another look at theirspreadsheets, they perhaps would see one glaring statistic:

Over 40% of fammily paychecks are consumed by debt payments.

And, lo and behold, debt payments DO NOT have to be perpetualfixed costs! (Although a lot of money is made, and a lot of momswork, because we falsely believe that they are.)

If moms, instead of lobbying legislators, politicians and school boards in their copious spare time, focused on immediately implementable solutions which directly attack and eliminate family debt, they can virtually guarantee a return of their safety net.

Recapturing 40% or more of your income from your creditors will build a Rainy Day fund in a matter of months -- not years!

And, if mom chooses to continue working, her income becomes a powerful strategy for ensuring a comfortable retirement as well.

Escape your creditors and you will escape this trap.

Author's Bio: 

Greg Moore is the author of the Debt Freedom Course, 'DebtIntoWealth -- Lessons from My Journey to Debt Freedom'.

To discover why

'Americans are carrying more debt than ever before and are behind payments in record numbers...' -- New York Post

and how to escape the Two-Income Trap, visit: