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    The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke

     
    Avoiding middle-class bankruptcy.
    2/2/2004
    In The Two-Income Trap, mother and daughter team Elizabeth Warren and Amelia Warren Tyagi reveal the underlying causes of the financial straits of middle class families struggling to stay afloat with mortgage and car payments and little cushioning in case of unexpected cash flow detours such as layoffs, divorces, and increasing medical costs. Elizabeth Warren is a Harvard Law School professor who specializes in bankruptcy and her daughter, Amelia Warren Tyagi, has an MBA from Wharton. Based on data from the 2001 Consumer Bankruptcy Project, which became the largest study focusing on families that had failed financially, the book uncovers startling facts that dispel myths about who constitutes the impoverished in America. The people in the most precarious predicaments are not the very young, unable to control the spending urge of new credit cards, nor are they the elderly faced with diminishing savings and deteriorating health. Instead, the authors discovered that the largest group of people who are financially bankrupt are parents with children living at home. In the end, the authors do not merely paint a grim picture with no way out. They offer remedies such as allowing parents to choose the public schools their children will attend to avoid the expense of private schools, and an end to predatory lending. Written for a wide audience including business leaders, policy makers, and most of all American families faced with the prospect of bankruptcy, the book gives practical advice for avoiding this situation.
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