Is It Smart for
Both of You
to Work?

If you're not achieving the desired financial income in your career, how about encouraging your spouse to work?
Plenty of Americans think that's an obvious solution. If you're one of them, think again.
"A second wage-earner seldom puts a family ahead financially," insists Henry S. Brock president of The American Financial Resource Center, Inc., and author of the book Your Complete Guide to Money Happiness. "It is essential that people understand the true economics of a two-income family."
This is particularly important for those who hope to improve their cash flow by sending a second wage-earner into the workforce, Brock believes.
"I recall a two-physician family, where each doctor earned well over $100,000 per year. After calculating all of the additional expenses involved, they realized that the second spouse was only contributing $12,000 a year to the family budget," Brock said. "Their solution? One spouse stayed home with the children while the other was freed up to work about three extra hours per week, which made up for the lost income. This is the common result of a thorough analysis."
For a realistic look at the impact of a second wage-earner on a family's financial profile, consider the following:

• Increased taxes. All of the second working spouse's income is taxed at the top marginal tax bracket of the first working spouse. That means a substantial portion of the second spouse's paycheck goes to the government.

• Increased FICA and Medicare taxes. Even if a second working spouse earns a fairly minimal amount, 40 to 45 percent usually goes to federal, state, and Social Security taxes right off the top. Only 60 cents of every dollar can go toward living expenses.

• Increased expenses. These often include a second car, increased auto insurance premiums for commuter driving, additional gasoline, parking fees, maintenance costs, repair bills, a second career wardrobe, bigger food bills due to more reliance on fast foods and pre-prepared meals, increased child care expenses, and so forth.

The result? By the time all the expenses and taxes are deducted, a second wage-earner making $15 an hour may end up contributing only $1 or $2 an hour to the family income.
"If a second spouse is working for reasons other than to add to the family income, such as variety, challenge, or professional pursuits, then the discussion obviously goes beyond economics," Brock said. "They need to weigh those reasons against the reasons not to work. But be certain that if you are working for economic reasons you do so with an accurate picture of the situation."
Brock discusses this topic and many others in Your Complete Guide to Money Happiness, a holistic approach to finances that incorporates the psychological, emotional, and spiritual dimensions of human existence, as well as the intellectual, practical and logical. Unlike many financial books on the market which only discuss strategies and tactics, Your Complete Guide to Money Happiness first lays a foundation of principles against which, Brock believes, any strategy or tactic may be measured. As a benchmark, these principles are then applied to over 300 financial strategies and tactics for the 1990s.
Brock heads one of America's largest fee-based financial consulting firms, The American Financial Resource Center, Inc., and Five Star Management Company, LLC. Money magazine named Brock one of the nation's top financial planners.

Editor's Note: The hardback edition of Your Complete Guide to Money Happiness is available in stores for $24.95. Copies may also be purchased directly from Legacy Publishing, Inc. Customers may place orders by calling (800) 390-1647 or writing to: Legacy Publishing, Inc., 2533 North Carson Street, Suite 2737, Carson City, Nevada 89706.

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