What the financial diaries of working-class families reveal about economic stresses, why they happen, and what policies might reduce them
Deep within the American Dream lies the belief that hard work and steady saving will ensure a comfortable retirement and a better life for one's children. But in a nation experiencing unprecedented prosperity, even for many families who seem to be doing everything right, this ideal is still out of reach.
In The Financial Diaries, Jonathan Morduch and Rachel Schneider draw on the groundbreaking U.S. Financial Diaries, which follow the lives of 235 low- and middle-income families as they navigate through a year. Through the Diaries, Morduch and Schneider challenge popular assumptions about how Americans earn, spend, borrow, and save—and they identify the true causes of distress and inequality for many working Americans.
We meet real people, ranging from a casino dealer to a street vendor to a tax preparer, who open up their lives and illustrate a world of financial uncertainty in which even limited financial success requires imaginative—and often costly—coping strategies. Morduch and Schneider detail what families are doing to help themselves and describe new policies and technologies that will improve stability for those who need it most.
Combining hard facts with personal stories, The Financial Diaries presents an unparalleled inside look at the economic stresses of today's families and offers powerful, fresh ideas for solving them.
Jonathan Morduch is professor of public policy and economics at the New York University Wagner Graduate School of Public Service. He is the coauthor of Portfolios of the Poor (Princeton) and other books. Rachel Schneider is senior vice president at the Center for Financial Services Innovation, an organization dedicated to improving the financial health of Americans.
"This sharp-eyed, sympathetic study . . . has a compelling new angle on the effects of long-term financial instability on working-class families. . . . This is a must-read for anyone interest in causes of--and potential solutions to--American poverty."--Publishers Weekly, starred review
"[A] groundbreaking study. . . ."--Richard Eisenberg, Forbes.com
"The book constitutes a plea for all those who interact with its subjects to look behind the annual averages to the weekly reality."--Peter Morris, Financial World
"Illuminating. . . ."--Diane Coyle, The Enlightened Economist
"As the book illustrates, families are constantly juggling their obligations and making decisions like which bills to pay and how much they can spend on groceries. It's hard to avoid a constant feeling of restlessness when your financial life is taking up so much brain space."--Lauren Gensler, Forbes.com
"The Financial Diaries succeeds in that rarest of goals: making you think and care at the same time. This is an invaluable look at the profound economic uncertainties of our era."--Jacob S. Hacker, author of The Great Risk Shift
"The Financial Diaries provides a voice for the millions of Americans struggling to take control of their financial lives. Morduch and Schneider’s vivid assessment of the causes and consequences of financial instability for the hard-working families in neighborhoods across the nation challenges all of us to do our part to address this widespread problem."--Dan Schulman, President and CEO, PayPal
Table of Contents:
Introduction: A Hidden Inequality 1
Worlds of Uncertainty
1 Earning 21
2 Spending 47
3 Smoothing and Spiking 65
How Families Cope
4 Saving 87
5 Borrowing 110
6 Sharing 130
New Ways of Seeing
7 Sometimes Poor 151
8 Secure and in Control 168
Another Princeton book authored or coauthored by Jonathan Morduch: