The Financial Diaries: How American Families Cope in a World of Uncertainty
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.
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"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
"Morduch and Schneider significantly advance our understanding of financial insecurity and intermittent poverty by showing how these stem from monthly and annual volatility in both income and spending--and not just low incomes. Employers, financial institutions, and policymakers should read this book and help American families better save, borrow, spend, and plan for their financial future."--Sarah Rosen Wartell, President, Urban Institute
"This powerful book should change the way we think about economic opportunity in America. Two of the nation's leading experts on consumer finance show how widespread and destructive economic instability has become, reaching from factory and fast-food workers into the ranks of the middle class. Rising costs and unsteady income not only strain families' efforts to meet basic needs--and generate a heavy reliance on self-defeating coping strategies--but challenge their faith in the American Dream. This book is an urgent wake-up call, and a roadmap for equally urgent reform."--Darren Walker, President, Ford Foundation
"The Financial Diaries is an invaluable framework to understand why working-class families feel uneasy with their financial situations. It makes an important case for the distinction between illiquidity and insolvency, and why policy solutions for each may not be the same."--Elisabeth Jacobs, Washington Center for Equitable Growth
"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
"[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,
"I really enjoyed this book. . . . These diaries are not just financial records but emotional ones too, and it is here that the book's greatest strength is apparent: there is nothing cold or hard about these finances. . . . Morduch and Schneider's research . . . translates easily to Europe. The commonality is uncertainty. . . . Morduch and Schneider make a clear and persuasive argument that blame should not be put on families for the way that they manage their finances in times of such instability and uncertainty."---Lisa Mckenzie, Times Higher Education
"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,
"Morduch and Schneider bring home the seriousness of these swings in income and the problems that result through detailed stories of the real families that participated in the study. Descriptions of the problems facing these people, which make up about half of the book, have a powerful effect on the reader."---Ron Haskins, Stanford Social Innovation Review
"Among Morduch and Schneider's most important findings is that this volatility was not primarily caused by losing or changing jobs. . . . Morduch and Schneider tell many stories about people whose finances have been buffeted by a changed economy."---Jeff Madrick, The New York Review of Books
"Morduch and Schneider carried out a fascinating research project. . . . [The Financial Diaries's] main point is important and holds up well: policies aimed at alleviating poverty need to look harder at increasingly erratic income streams."--Foreign Affairs
"A revealing socioeconomic portrait that does a great deal more to illustrate financial stability and habits than most economic studies. . . . [It] deserves to be read carefully by those across the political spectrum who earnestly desire the improvement of the economic circumstances of those at the bottom of the income scale."---Andrew J. Spencer, Journal of Markets and Morality
"2018 Silver Medal Winner in Finance/Investment/Economics, Independent Publisher Book Awards"
"Winner of the 2018 Silver Medal in Economics, Axiom Business Book Awards"