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monthly expenses are two and a half times
higher than Tom and Susan’s were back in 1973 (once again, all numbers are adjusted for inflation), so they have less discretionary money left over even when they are both fully employed. Without Justin’s paycheck, the modern couple doesn’t have a prayer of making ends meet.

    Source: Analysis of Consumer Expenditure Survey. For further discussion of the calculation of discretionary income for a one-income family in the 1970s and a two-income family in the 2000s, see chapter 2.
    FIGURE 3.1 Income drop when husband loses job
    Even if Justin finds a job within a few months, the family will continue to operate from a deficit, since there will be no extra income available to pay off the debts that mounted up while his paycheck was gone. This is in sharp contrast to Tom and Susan: If the former stay-at-home mother stays in the workforce temporarily, the couple should regain its financial footing within a few months of Tom’s reemployment.
    Proponents of the Over-Consumption Myth would be quick to point out that Justin and Kimberly don’t actually need $68,000 a year and that their family should be able to get by on $48,000 a year. After all, Tom and Susan seemed to be getting along just fine—and holding
on to their spot in the middle class—on $38,700 a generation ago. Be that as it may, Justin and Kimberly have signed binding contracts and long-term mortgages, made commitments and promises that depended on all $68,000 of income. They could (and in all likelihood would) cut back around the edges. They might cancel cable or eliminate take-out dinners; they could postpone replacing the stained carpet and cross beer and soda off the shopping list. 12 But the effect of such belt-tightening would be modest at best. They cannot make up for the almost $20,000 hole in the family’s budget by eating less or forgoing a new pair of sneakers. In order to pull back to a $48,000 budget, Justin and Kimberly would need to sell their home, trade in their car, pull their younger child out of preschool, and enroll their older son in a lower-cost after-school day-care center—a process that would take months to accomplish. Moreover, they would be unlikely to take such draconian measures until they were already deep in financial trouble and forced to admit that the lives they once lived were gone forever.
    The finger-waggers might not be willing to exonerate Justin and Kimberly, but it is important to notice something about their expenditures that turns the standard financial analysis on its head. Justin and Kimberly are vulnerable precisely because they did not over-consume on trinkets. They are vulnerable because they made long-term commitments to what most would consider sensible family purchases: housing, education, health insurance. They probably don’t want to hear it right now, but Justin and Kimberly would be more secure financially if they had whooped off her entire salary on big-screen TVs and trips to the Bahamas, because those purchases do not require an ongoing financial commitment.
    Should Justin and Kimberly have saved one income, locking it in the bank for a rainy day? Maybe, but even here the picture must be etched in shades of gray, rather than black and white. Money in the bank is great, but so are college degrees, decent medical care, and homes in good school districts. Indeed, Kimberly might ask the over-consumption critics and the financial planners what would be the point of working if she couldn’t spend the money to buy better lives for her children? She
wasn’t sending her kids to day care every day just so she could go on a cruise or plan some glorious retirement for herself and her husband. Cash savings, money for retirement, treats, and vacations could come later. This couple decided that their children needed a good home now, good day care now, and good health insurance now . Many parents—and even a fair number of financial analysts—would agree with them.

Good