Comments on: Two-Income Trap: Why Many Couples Shouldn’t Both Be Working For The Money http://www.savingadvice.com/blog/2007/05/10/101411_two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money.html Bridging the gap between saving money and investing Sun, 12 Oct 2008 09:08:36 +0000 http://wordpress.org/?v=2.6.1 By: chris h http://www.savingadvice.com/blog/2007/05/10/101411_two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money.html#comment-204255 chris h Mon, 07 Jan 2008 16:33:46 +0000 http://www.pfadvice.com/2007/05/10/two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money/#comment-204255 finally a clearly written, logical post offering good personal finance advice based on facts. i've been stumbling finance articles for months and this is one of the few that didn't make me want to strangle the author for wasting my time and his/hers. So thank you for contributing some substance and not another 1500 word post on if you save a dollar a day you can be a millionaire by the time you're dead. finally a clearly written, logical post offering good personal finance advice based on facts. i’ve been stumbling finance articles for months and this is one of the few that didn’t make me want to strangle the author for wasting my time and his/hers. So thank you for contributing some substance and not another 1500 word post on if you save a dollar a day you can be a millionaire by the time you’re dead.

]]> By: Jennifer http://www.savingadvice.com/blog/2007/05/10/101411_two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money.html#comment-203615 Jennifer Mon, 07 Jan 2008 01:59:16 +0000 http://www.pfadvice.com/2007/05/10/two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money/#comment-203615 Hi Terri, Thank you for providing this information. It makes me feel so much better that the decision my husband and I have made together, that being for me to stay home and raise are yet unborn child, is actually not a bad one in regards to finances and every other aspect. I will refer to this blog on my web site. Kind Regards, Jennie Hi Terri,

Thank you for providing this information. It makes me feel so much better that the decision my husband and I have made together, that being for me to stay home and raise are yet unborn child, is actually not a bad one in regards to finances and every other aspect.

I will refer to this blog on my web site.

Kind Regards,
Jennie

]]> By: Tammy http://www.savingadvice.com/blog/2007/05/10/101411_two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money.html#comment-96484 Tammy Thu, 30 Aug 2007 02:27:33 +0000 http://www.pfadvice.com/2007/05/10/two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money/#comment-96484 My husband and I both work. I have always worked part time, even when our son was a baby, after the 1st year. Now to be home for him my husband works overnight, I in the day. I work a 30 hour week, he a 40. I have flexibility and can work anywhere over the 7 days. My husband was only too glad to take the overnight shift after being downsized and out of work for 2 months (save as much as you can for emergencies-it saved us). We live in a relatively high dollar area where a 900 sq ft condo sells for 300k. I know there are more expensive places, but we have never been able to keep pace with the housing market, so we still rent a 2 bedroom apt @ 1500/mth. I am sure there are cheaper. We have placed value on our two children and sacrifiiced many dreams to see them succeed. Our son is in middle school and our 19 year old daughter is in her second year of college. Together my husband and I make about 65-70k a year. We both have second weekend jobs that consist of 2-3 hours of work, but pay high dollar. We have what we need. We share a car, a small 12k dollar car with exceptional gas mileage. We get free movies since our daughter works at the theater and our apartment has a great pool and an excellent gym. With all that, you would think we have it made. Then why do I feel like I am missing something? Like I am being short-changed? I don't know. A beach vacation would be fun, we pack a tent and hit the sand overnight through our state parks, but a hotel with a shower and a ceramic toilet, that would be nice. A backyard for my kids would be nice, but they are too old for that now, I suppose. My own new car, a car for my daughter. My kids having their own rooms, that would be a dream come true. Some days I feel like I failed, but mostly because I have been lured by marketing and jealousy. We use every penny we bring home wisely, just once I want to go to the grocery store without a list or look for a car based on my inner child. Bright side, kids college paid, retirement funded, health, dental, stocks, bonds...but still I dream of complaining about cutting the grass or painting the house. Silly, but I can't help it. My husband and I both work. I have always worked part time, even when our son was a baby, after the 1st year. Now to be home for him my husband works overnight, I in the day. I work a 30 hour week, he a 40. I have flexibility and can work anywhere over the 7 days. My husband was only too glad to take the overnight shift after being downsized and out of work for 2 months (save as much as you can for emergencies-it saved us). We live in a relatively high dollar area where a 900 sq ft condo sells for 300k. I know there are more expensive places, but we have never been able to keep pace with the housing market, so we still rent a 2 bedroom apt @ 1500/mth. I am sure there are cheaper. We have placed value on our two children and sacrifiiced many dreams to see them succeed. Our son is in middle school and our 19 year old daughter is in her second year of college. Together my husband and I make about 65-70k a year. We both have second weekend jobs that consist of 2-3 hours of work, but pay high dollar. We have what we need. We share a car, a small 12k dollar car with exceptional gas mileage. We get free movies since our daughter works at the theater and our apartment has a great pool and an excellent gym. With all that, you would think we have it made. Then why do I feel like I am missing something? Like I am being short-changed? I don’t know. A beach vacation would be fun, we pack a tent and hit the sand overnight through our state parks, but a hotel with a shower and a ceramic toilet, that would be nice. A backyard for my kids would be nice, but they are too old for that now, I suppose. My own new car, a car for my daughter. My kids having their own rooms, that would be a dream come true. Some days I feel like I failed, but mostly because I have been lured by marketing and jealousy.
We use every penny we bring home wisely, just once I want to go to the grocery store without a list or look for a car based on my inner child. Bright side, kids college paid, retirement funded, health, dental, stocks, bonds…but still I dream of complaining about cutting the grass or painting the house. Silly, but I can’t help it.

]]> By: Dave and Katy’s Travels » Two income trap narrowly avoided http://www.savingadvice.com/blog/2007/05/10/101411_two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money.html#comment-96359 Dave and Katy’s Travels » Two income trap narrowly avoided Wed, 29 Aug 2007 22:30:07 +0000 http://www.pfadvice.com/2007/05/10/two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money/#comment-96359 [...] read plenty of times about the two income trap.  Basically, if you make two incomes, you are taxed at a higher level.  Then because you’re [...] [...] read plenty of times about the two income trap.  Basically, if you make two incomes, you are taxed at a higher level.  Then because you’re [...]

]]> By: 10 Ways Working Can Cost You - SavingAdvice.com Blog http://www.savingadvice.com/blog/2007/05/10/101411_two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money.html#comment-82821 10 Ways Working Can Cost You - SavingAdvice.com Blog Fri, 03 Aug 2007 15:01:23 +0000 http://www.pfadvice.com/2007/05/10/two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money/#comment-82821 [...] probably heard before that it doesn’t always make sense for both adults in a household to work because the second spouse’s income is all taxed at the [...] [...] probably heard before that it doesn’t always make sense for both adults in a household to work because the second spouse’s income is all taxed at the [...]

]]> By: Teri http://www.savingadvice.com/blog/2007/05/10/101411_two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money.html#comment-62877 Teri Fri, 22 Jun 2007 18:27:43 +0000 http://www.pfadvice.com/2007/05/10/two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money/#comment-62877 Sarah, You bring up a good point. Our strategy when my husband does return to work is to find a job with a good 401k plan or good health benefits (which we don't have now). Anything that will increase our overall economic standing, without losing much of the benefit of the second wage to taxes. My point being, a second wage that mostly goes to a 401k is not as heavily taxed, and will give you much more benefit in the 2-income vs. 1-income debate. From a purely economic standpoint, if you can afford the childcare and the 401k contribution both, it would be a very large benefit to give up. Maybe not worth it. On the other hand, most people don't give up a second income based on economic decisions, it's because they want to be home with their kids. If you dutifully contribute the max for a number of years and want to take a break for a while to raise kids, you may not be so bad off if you contributed sgnificantly to your 401k while you were young. I think overall though you will lose more in this case, going to 1 income, since the money you put to your 401k is really tax-free to you. Sarah,

You bring up a good point. Our strategy when my husband does return to work is to find a job with a good 401k plan or good health benefits (which we don’t have now). Anything that will increase our overall economic standing, without losing much of the benefit of the second wage to taxes.

My point being, a second wage that mostly goes to a 401k is not as heavily taxed, and will give you much more benefit in the 2-income vs. 1-income debate.

From a purely economic standpoint, if you can afford the childcare and the 401k contribution both, it would be a very large benefit to give up. Maybe not worth it.

On the other hand, most people don’t give up a second income based on economic decisions, it’s because they want to be home with their kids. If you dutifully contribute the max for a number of years and want to take a break for a while to raise kids, you may not be so bad off if you contributed sgnificantly to your 401k while you were young.

I think overall though you will lose more in this case, going to 1 income, since the money you put to your 401k is really tax-free to you.

]]> By: Sarah Marshall http://www.savingadvice.com/blog/2007/05/10/101411_two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money.html#comment-62738 Sarah Marshall Fri, 22 Jun 2007 13:50:27 +0000 http://www.pfadvice.com/2007/05/10/two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money/#comment-62738 Teri, could you comment on how to evaluate the long-term benefit of the second earner's contributing to a retirement plan? I squirrel away the maximum into my 401(k) plan, sacrificing significant cash now for (I hope) an easier future. I may be working for little in terms of current cash flow, but it should pay off in the future. I could contribute to an IRA as a non-working spouse, but significantly less. Teri, could you comment on how to evaluate the long-term benefit of the second earner’s contributing to a retirement plan? I squirrel away the maximum into my 401(k) plan, sacrificing significant cash now for (I hope) an easier future. I may be working for little in terms of current cash flow, but it should pay off in the future. I could contribute to an IRA as a non-working spouse, but significantly less.

]]> By: Don't Mess With Taxes http://www.savingadvice.com/blog/2007/05/10/101411_two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money.html#comment-54321 Don't Mess With Taxes Mon, 04 Jun 2007 16:28:37 +0000 http://www.pfadvice.com/2007/05/10/two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money/#comment-54321 <strong>Tax Carnival #19: The lazy, hazy, crazy days of summer taxes...</strong> Roll out those lazy, hazy, crazy days of summer.Those days of soda and pretzels and beer.Roll out those lazy, hazy, crazy days of summer.Dust off the sun and moon and sing a song of cheer. Ah, summer. It might be hazy where you are, and even during the... Tax Carnival #19: The lazy, hazy, crazy days of summer taxes…

Roll out those lazy, hazy, crazy days of summer.Those days of soda and pretzels and beer.Roll out those lazy, hazy, crazy days of summer.Dust off the sun and moon and sing a song of cheer. Ah, summer. It might be hazy where you are, and even during the…

]]> By: FollowSteph.com » Latest Links http://www.savingadvice.com/blog/2007/05/10/101411_two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money.html#comment-51297 FollowSteph.com » Latest Links Mon, 28 May 2007 01:16:07 +0000 http://www.pfadvice.com/2007/05/10/two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money/#comment-51297 [...] Two-Income Trap: Why Many Couples Shouldn’t Both Be Working For The Money This is a good example of why you should always do the math before you decide anything. Sometimes you can come out ahead, or very close anyways, with a completely different path. [...] [...] Two-Income Trap: Why Many Couples Shouldn’t Both Be Working For The Money This is a good example of why you should always do the math before you decide anything. Sometimes you can come out ahead, or very close anyways, with a completely different path. [...]

]]> By: Sarah http://www.savingadvice.com/blog/2007/05/10/101411_two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money.html#comment-50579 Sarah Fri, 25 May 2007 22:38:20 +0000 http://www.pfadvice.com/2007/05/10/two-income-trap-why-many-couples-shouldnt-both-be-working-for-the-money/#comment-50579 It pretty much comes down to if you can have family take care of your kids or work opposite shifts to avoid daycare. If you are paying full shot for daycare,.. why even bother working two jobs. My husband and I both work, but because he's a nurse (night shifts, etc..) and I have family to take them a few times a week, we can see great benefits from the second job. It pretty much comes down to if you can have family take care of your kids or work opposite shifts to avoid daycare. If you are paying full shot for daycare,.. why even bother working two jobs. My husband and I both work, but because he’s a nurse (night shifts, etc..) and I have family to take them a few times a week, we can see great benefits from the second job.

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