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The Two-Income Trap

3.85 of 5 stars 3.85  ·  rating details  ·  1,023 ratings  ·  206 reviews
In this revolutionary exposé, Harvard Law School bankruptcy expert Elizabeth Warren and financial consultant Amelia Tyagi show that today's middle-class parents are increasingly trapped by financial meltdowns. Astonishingly, sending mothers to work has made families more vulnerable to financial disaster than ever before. Today's two-income family earns 75% more money than ...more
Paperback, 272 pages
Published August 18th 2004 by Basic Books (first published September 1st 2003)
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(showing 1-30 of 2,411)
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Valarie
Jun 19, 2008 Valarie rated it 3 of 5 stars  ·  review of another edition
Recommends it for: people who feel the economy is rolling right over them.
If you have two incomes in a home, make sure your life is such that you can live on one of the incomes and sock the other income away in savings and investments. Which is extremely good advice (and yes it can be done--you don't need half of that crap people tell you you need).

Don't have kids, but if you must, see if you can refrain from vastly overleveraging yourself to keep your kids competitive in some future labor marketplace. If the houses in the neighborhoods with excellent schools are far
...more
j. young
I gained interest in this book, and with Dr. Warren's work in general, when I watched a lecture taped at UC Berkeley back in 2007 (see here). Her conclusion was that the common notion of explaining family bankruptcies and indebtedness on frivolous over-consumption was simply a myth. Needless expenditures, Warren contends, weren't a significant contributor to family indebtedness, but, instead, the cost of staples (like transportation, housing, health care, etc.) had increased to unsustainable lev ...more
Ann
This book was mentioned in one of the many interviews I've seen Elizabeth Warren give, and it intrigued me because I am currently a stay-at-home mom (SAHM). I remember her getting a lot of attention for the idea that it's actually financially beneficial for a family to have a SAHM (or dad)!

If something happens to the working parent, the SAHP can jump in the work force and provide a new income stream; a family that counts on both incomes does not have a way to get an extra income stream in the e
...more
Robert Gilbert
I read this book in 2003 and was disappointed then. I was only reminded of reading it when the eldest author appeared in the news recently. It still sits on my shelf with my notes inside it from the research I have been doing on the same problem. While it is true that this book somewhat predicts the housing crisis that came about in 2008, I was not surprised since I had been studying the "double-income economic disorder" since 1999. While some might say that it is a shame more people had listene ...more
Katie
"The Two-Income Trap" is a book I've been meaning to read for years. I discovered it in college when I read the first fifty pages or so in a Barnes & Noble between classes. I found it fascinating, and vowed to eventually read it in full. And now I have!

There's so much in this book that its hard for me to know where to start. Written by the mother daughter team of Elizabeth Warren and Amelia Warren Tyagi, "The Two-Income Trap" examines the current financial weaknesses of the middle class, and
...more
Brian Hodges
This book was a real eye-opener to the common credit and real estate mistakes that people (especially married couples) have been making ever since we switched over to a two-income nation. I didn't realize it at the time, but this book was oddly prescient in regards to the current housing and financial crisis we're in now and I thank god I read it when I did. It seriously "scared me straight" in regards to buying a house. And while all my friends and family were leaping head first into the housin ...more
lindsay
This book had the potential to be SO interesting, with a lot of thoughtful points about middle class families. Instead, it's a pompous piece of self-indulgent writing from a pair of know-it-alls. I tend towards liberalism and this book still pissed me off. If they're not insulting conservatives and making snide remarks about those of us who believe in concepts like personal responsibility, they are advocating for a paternalistic government that tells us what we can and cannot do because we're in ...more
Virginia
A Harvard economist's take on rising rates of bankruptcy among middle class couples. Interesting read, especially since it was written a few years ago now and foreshadowed some of the present problems in the housing market. I particularly liked that it justified my suspicions that couples today are having a harder go of it than our parents did, despite greater levels of education and two steady incomes. Includes good tips for how to stay financially solvent.
0spinboson
This book provides support for a lot of intuitions I've had for a while now. Put briefly, the book shows that the believing in the 'small government' meme is extremely dangerous, because it provides "intuitive" support for the progressive dismantling of all the useful parts of government, while all the parts that aren't useful are certain to be maintained by politicians who know where their next campaign finance check comes from.
Elizabeth Warren attacks this idea pretty successfully. She explain
...more
Mary
This book does an excellent job explaining the squeeze on the middle class since the 1970s. It dispels the myth that Americans just spend too much and instead points to real change that makes it much harder for middle-class families to stay afloat: rising health care costs, and college tuition and the lack of "insurance policy" formerly provided by a stay-at-home parent.

But the trap is really sprung when two-income couples have children. When buying a house in America, you really buy a school. A
...more
Ross
Aug 03, 2008 Ross rated it 5 of 5 stars
Recommends it for: couples starting out
Shelves: economics
This book is now five years old, longer than the shelf life of most “policy” books -- most personal finance books, too. So I was fully prepared to find the facts stale, the predictions obsolete. Wrong. Even though it was written before the term subprime entered the lexicon, this book explains why those mortgages were bound to cause problems: Families fail financially when they commit themselves to mortgages and other long-term fixed costs that they won’t be able to pay during the bad times. And ...more
Emily
he Two-Income Trap is a book about the economic pressures facing families today, but above all it's an indictment of an increasingly predatory credit-card industry. (One of the book's authors was prominently featured in the recent Frontline report about credit cards.) The authors show how having a second wage earner hasn't been the boon that families expected. Parents--crunched by a competitive housing market and expensive college tuition--devote 75% of their income to fixed commitments like the ...more
Amanda
Aug 08, 2010 Amanda rated it 5 of 5 stars  ·  review of another edition
Recommended to Amanda by: I searched out Warren after seeing her on a few documentaries
Family economics is of particular interest to me for two reasons: (1) I keep losing my job so it seems like we are always struggling, and (2) As a case manager, I work (when I am working) with mostly economically dis-advantaged people for whom I feel it is part of my job to educate for their own protection. So, I really loved this book.

In this book the authors point out that the disappearing middle class is a result of not over-consumption but our desire for safety and education coupled with the
...more
Windelbo
I decided to read this book to find out why there is such a fuss in dc over Elizabeth Warren's nomination to head the new consumer protection agency. After finishing, I am convinced that she is the perfect person to head this agency. She seems to have devoted her career to thoughts on the economics of the American family. She does not just blame blame lenders or borrowers for bankruptcies and other financial hardships. Instead she lays out statistics and facts that describe how families find the ...more
Leila T.
I read this in 2007, around the time that I saw the documentary "Maxed Out" and also around the time my husband was reading several financial blogs that presaged the current recession(for e.g., Calculated Risk). Actually, the author, Elizabeth Warren, was interviewed on that documentary, and she was so compelling I sought out her book.

This book is very good, helping one understand how house prices became so insanely inflated---the bubble---and also giving reasons to be sympathetic, rather than
...more
Katherine
I was assigned this book for a seminar on work and economic security, but I'd been hoping to read it for a long time. The issues of family economics and gender dynamics seem to me a wellspring for interesting research and study, though not as much is done as could be (Arlie Hochschild's books on this subject are well worth reading, for those looking). To top it off, I took Elizabeth Warren's bankruptcy class in law school and wanted to see what kind of book she'd write.

Her book is very good, if
...more
Adam
Only now starting to comprehend the reasons for the foreclosure crisis, and this book goes a long way towards helping that. Talking about the methods of credit card companies and the deregulation of the credit industry puts a lot of recent events in perspective.

On a personal financial front, the trap mentioned in the title is more the evolutionary result of 1) women entering the workforce and 2) parents bidding each other up on housing prices in order to live in a good school district...which r
...more
Rachel
I enjoy reading books that bust cultural myths with solid data. Elizabeth Warren's book dispels the idea that two incomes are better than one and that it's not the unashamed, lazy societal deadbeats that are filing for bankruptcy -- it's middle class parents. Two income households no longer have mom as a "safety net" when emergencies arise.

She wrote this book in 2003 and, as history has shown, she totally predicted the housing bubble would burst because of subprime loans and predatory credit car
...more
Elizabeth
This offered a different perspective on why the middle-class has money issues than the affluenza-type books, so it was a good read, especially since I am not part of a two-income family (or have a family) so don't have first-hand experience.
Irene
A Harvard Law bankruptcy professor writes crisply about the fiscal rape of average Americans at usurious, yet legal interest rates by the credit card and/or mortgage divisions of the major banks.
Marcus
This book was written in 2003 by Dr. Elizabeth Warren who was recently named interim head of the newly formed Consumer Protection Agency. I bought this book in 2004 as I marveled at the soaring housing prices and wondered how people could afford the prices offered.

This book is cautionary tale of why couples should NOT combine their incomes to take on long term fixed costs ie..... 30 year mortgages. The book contradicts American traditions like stretching yourself to buy as much house as you can
...more
Eric
I've argued for some time that feminism was a bad deal economically for the average American family. Over time, it roughly doubled the pool of available labor, halving wages. It also put families that tried to rely on one breadwinner at a competitive disadvantage for purchasing certain assets - homes for example. The Two-Income Trap explores some of these ideas, but glosses over others, all the while exempting families from poor decisions and blaming them solely on macroeconomic forces. I expect ...more
Sarah
So far warren has a rather confusing way of presenting her hypothesis. In the first chapter she seems to be heading towards a conclusion but at the last minute veers off and examines the concept she is presenting in further detail. It's rather frustrating but I attribute that to her attempt to analyze the details completely before making generalizations. Overall, however, my impression is that of someone who truly cares about the status of low-middle income families. Some of the statistics on mo ...more
Sue
The overall tone of this book was a bit heavy handed against the ideas of Americans spending more money than they make (subject of Juliet Schor's books) and a bit repetitive overall. She's running for the Senate now, so her tone is early political speak I think. Saying that, there are a few good nuggets to take away from this book. I think any family managing on one income today should definitely take award look as to why they need to send the second spouse out to work. In retrospect, I don't th ...more
Beckie
"The Two-Income Trap" was published in 2003. In some ways, this makes the book's pronouncements about things like sub-prime mortgages outdated, in others it just makes the authors look smarter.
Those authors already look pretty smart: they are Elizabeth Warren, a Harvard Law professor who is now the special adviser for the Consumer Financial Protection Bureau, and her daughter, Amelia Warren Tyagi.
"The Two-Income Trap" lays out a counter-intuitive case for why so many middle class families are go
...more
Cendri
If life were a Greek myth, this book would play the part of Cassandra to the current economic crisis. Published in 2003, it deals with why record numbers of families are falling into debt and bankruptcy. It's also a timely documentation of the laws of unintended consequences, in which cultural and regulatory changes occurring over the last forty years have put increasing pressure on middle class families. Warren and Tyagi (mother and daughter) try to dispel the myth that most people file for ban ...more
Cassi
This was a very interesting read. They present a lot of eye opening studies and statistics about bankruptcy. It is an especially interesting read as you realize it was written in 2003 and can look back at it with knowledge of what has happened to the housing market since that time. Their theory that the housing bubble was formed as women went into the workplace to give their families the edge they needed to compete for houses in good neighborhoods and spots for their kids in good school district ...more
Tom Darrow
The basic argument of this book is that a family who has both parents work is actually LESS stable than a family that has one income. It sounds illogical, but Warren makes a convincing argument. Essentially, when both parents work, that family adopts a lifestyle that depends on two incomes. There are all sorts of hidden costs with having both parents going into the work force... a second car, gas, child care, work wardrobe, eating out for dinner, etc. That's all well and good until one parent lo ...more
Mark Victor Young
The main point of the book is that parents were bidding up prices on houses in the "good" neighbourhoods to give their kids a shot at the "good" schools. Over this years, this has driven up prices on suburban homes and forced couples to put both salaries on the line to cover the mortgage--which means instant disaster if one job is lost. Also makes many interesting points about bank deregulation which presage the "sub-prime mortgate" disaster quite handily. She also catches Hillary Rodham Clinton ...more
Birdbath Birdbath
My friend, a Harvard Law grad, told me about this book and I've been raving about it ever since, never having read it. Now I'm reading it and there are no big surprises - meaning I've been raving about it correctly. But to see the data in black and white, digest the information and reconclude what I already knew, is a good feeling. Our household recently went from two incomes to one and although it has meant a lot of subtle changes, I am grateful we can do it without too much trouble. The subtle ...more
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Elizabeth Warren (born 1949) is an American academic and politician, and the current senior U.S. Senator from Massachusetts and a Democrat. She is the Leo Gottlieb Professor of Law at Harvard Law School -- where she taught contract law, bankruptcy, and commercial law -- and devoted much of the past three decades to studying the economics of middle class families. In the wake of the 2008-9 financia ...more
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