An Interview with Jonathan Morduch & Rachael Schneider, authors of The Financial Diaries.
What makes the U.S. Financial Diaries different from any other financial surveys of American households?
We set out to find people who were willing to open up their entire financial lives to us for a year. Two hundred and thirty-five families and individuals let us track every dollar that they earned, spent, borrowed, and saved or that they revived from others.
We got to know many of the families personally. And seeing 235 different lives allowed us to draw connections between people facing similar dilemmas in radically different situations–from undocumented migrant workers in northern California to middle-class families in Ohio. Because money touches so much of life, we could see most other parts of their lives too.
Each of the book’s chapters opens with one of two individuals and followers their work and family life. Describe a memorable participant in the diaries project.
The book opens with the story of Becky and Jeremy, a young couple raising a family in a small town in Ohio. Their story reveals a common struggle to achieve both mobility and stability. Jeremy was working full-time, fixing trucks on commission. Becky mainly stayed home to raise their children, volunteered, and occasionally cleaned houses on the side. Jeremy liked his job, but fixing 18-wheeler trucks is a seasonal business and Jeremy’s pay was unsteady. Even though Becky and Jeremy had many of the markers of middle-class life–a comfortable home, a tight community and solid employment–they felt incredibly insecure. At the end of the study Jeremy switched to a lower paying job with a longer commute–but at least it came with a steady paycheck.
What do most of us not understand about the financial plight of the working and middle classes–and what can we learn from it?
First, families feel insecure for perfectly good reasons–income and spending needs are often unpredictable and hard to manage, even for middle-class families. Second, people cope with the risks in surprising and inventive ways. They strategize with family members. They save actively, even if not for the long-term. They find ways to discipline their borrowing. None of the ideas are flawless, but some point to ways businesses and governments can create betters solutions. Maybe more important, the stories in the diaries show how unbalanced America has become in terms of whose shoulders are carrying most of the risk today.
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File created: 11/1/16