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Comment by jseliger | Hacker News Reader

I highly recommend the book "The Two Income Trap". It basically tries to prove that the transition to dual income households damaged the financial security of many families

A great book. It can also be read profitably in conjunction with Matt Yglesias's The Rent is Too Damn High. School districts are weirdly tied to real estate in the U.S.; many places with good districts also have severe land-use control laws that prevent the creation of new housing units on a given parcel land; and, consequently, people will pay a lot of money for scarce housing that comes bundled with good school districts. Two-earner households make paying for the housing easier, but two-earner households are often also more economically fragile (especially considering the prevalence of divorce).

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> School districts are weirdly tied to real estate in the U.S.

Rich people want nicer schools. These same people have a lot of influence and or control in our society, so they dictate how the money was divvied up, to make sure their kids got the best.

In many other countries the money is put into a large "pot" and then redistributed from that. So most schools per student budget is similar but with adjustments for cost of living. The US is actually the odd duck for how monied some public schools are, while depriving almost impoverishing others.

Charter schools only make the situation worse, since many utilise public funds while also charging parents (so effectively a private school that keeps poor kids out, but gets to utilise public money to do so).

Everyone wants nicer schools. Wealthier people are more likely to be able to live in areas with good schools; they can pay for the rents and mortgages necessary to do so.

I don't understand what it is you're trying to add.

I am talking about an issue of fairness. You're just pointing out the status quo.

I encourage you to read the aforementioned books. I believe the person you're responding to was just trying to point out that this issue is bigger than just rich people fixing the game.

> but two-earner households are often also more economically fragile

Can you elaborate on that? It doesn't make sense to me. When we were on a single income in my family, it felt a lot more fragile than now that we have two incomes.

Most people on two incomes didn't decide to do so voluntarily. They did so because they couldn't afford not to.

So, instead of having a household where you have one parent working to support the family and another parent who can occasionally add income but doesn't have to, now you have lots of people where they are fully tapped out and both parents are working full time.

Potentially a two income household allows it's expenses to grow to take advantage of both incomes to some extent.

As a couple with two high incomes you actually have to try really hard not to let expenses get to the point where you can't live without both incomes. So in effect you now have 1 big income that you rely on.

In terms of the fragility, there is more chance of losing 1 out of 2 jobs (i.e. 50% of the income) than there is of losing 1 out of 1 jobs (i.e. 100% of the income). (I hope I explained this right - but it's how my thinking goes).

It's explained in the book I mentioned. You would also need to educate yourself on personal finance by reading some other books to get a more holistic picture (The Millionaire Next Door is a good place to start).

There's three things you need to understand about personal finance:

1. The first is that shit happens and most people don't plan for it (because they haven't been educated on personal finance). Most resources suggest that you keep an emergency fund of 6-12 months of living expenses saved up for when shit happens. We know that most people do not have this. I'm not even going to bother providing a source because there are so many sources on how Americans don't save.

2. The number one expense for any given household is going to be housing (whether owned or rented).

3. While you can cutback on many things, you cannot cutback on a mortgage. So if there are permanent setbacks to your finances: someone loses their job and gets another one that pays less, someone gets hurt and can't work for a while or ends up on disability, someone has to stay home to take care of an unhealthy relative, etc, then you can be pretty much shit out of luck unless you're house has equity on it and you can sell and downsize (although most people will just take a loan out against their equity lol).

So these are the characters of our stage. If you get a mortgage based on 1 person's income and something happens, there is another person there to step up. This provides a powerful safety net for the family. If you get a mortgage based on both people's incomes, you are putting yourself at greater risk because if something were to happen to either person you would not be able to afford to keep your 15-30 year agreement. And the cost of getting out of that agreement is enormous (as we saw with the recent housing crash).

I encourage you to read more on personal finance. It's incredibly fascinating.

You realize the reason people move to 2 incomes is because they can't afford to live off one?

You realize that a lot of people don't have savings because they live paycheck to paycheck trying to survive?

Both of your questions would be answered by reading the aforementioned books and by learning more about personal finance.

Also: https://www.reddit.com/r/personalfinance

So no, and you will just continue with the condescending assumption that anyone questioning you doesn't know anything?

I'm not sure how you would like me to answer false assertions? Especially since my post is clearly about people with a mortgage (as is the book I recommended). The best I can do is point you in the right direction to properly educate yourself.

Personal finance books are often a lot of garbage with a little bit of wisdom thrown in that requires effort to extract.

http://badmoneyadvice.com/2009/03/whats-wrong-with-the-milli...

For point 3 you might also be able to change your loan to interest only and thereby reduce the amount required.

A two income home is like putting valuable data in a RAID-0 HDD array.

I guess we're covered then :) We' re still working on building an emergency fund the size we want, but it's already there to cover us for at least half a year.

Right now we pay more than what we'd like on rent, but next year we'll move to a cheaper place.

We're saving for a large down payment for when it comes time to buy a home. Also, we'll get a mortgage as if only one of us were working, we have already agreed on that. And we're planning on moving to a state with a low cost of living when that time comes.

So in our case, two incomes is pretty solid.

Two income households are usually households that depend on two incomes. In other words instead of basing your standard of living on one income you base your standard of living on two. So both incomes are required to pay your rent/mortgage/water bill/insurance/car payments/etc.

It is more fragile because 1) it encourages living well beyond your means and 2) the odds of job loss/income reduction is now doubled and the stakes are higher as the second partner can't get a job to pick of the slack in the event of job loss.

It goes back to the old observation that people living paycheck to paycheck on $30,000 tend to also live paycheck to paycheck if their income increases to $60,000.

So if there is a hypothetical one income family making $40,000/year is unable to pay bills instead of reducing spending (who wants to do that?) the other partner starts working. Their lifestyle tends to rise with income and now they are just getting by with $60,000/year and put themselves in a more fragile place. This is how people tend to behave.

Instead they could have reigned in on their expenses a bit and perhaps taken on a second income to save for a rainy day.

The way to do two incomes (if at all possible) is to base your standard of living on just one. Use the other income to invest, save, or fuck around (travel, dinner, etc.). This type of two income house is much less fragile as savings and investments can accumulate, emergencies are easily taken care of, and spending can be reeled in in case of financial heartship. Either way with two incomes savings should be a very high priority to reduce fragility.

So two income households certainly can be less fragile but often aren't in practice.

Thanks, I guess I should have deduced that myself. In my case both my wife and I are software engineers making really good salaries, so we definitely don't need both of us to be working. We don't even do it on purpose but looking at our lifestyle it is definitely on a level that could be sustained with only one of our salaries :)

Its very easy for many families to increase spending to match income without realizing it. Suddenly every expense is a "need."

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