FinHealth matters, and a private look into a financial diary shows us why

By Rachel Schneider, CFSI

When Jonathan Morduch and I started working with the families associated with the US Financial Diaries research — featured in our recently released book, The Financial Diaries — we thought it might be hard to get people to share the intimate details of their financial lives with us. After all, how many of us would want someone to read our diary, much less read the details of our financial lives and see the tough financial decisions we’d made..and then want to *talk* about it? No thanks, right?

But these conversations are critical to understanding the state of financial health in America today. It’s so easy for us to say that people don’t earn enough, or don’t manage their money well, or that they fail to plan for emergencies. It’s much harder to look at the reality of a family’s financial life — where so many factors play a role that it’s hard to point to just one thing that could solve the problem. The fact is, hard work is no longer — and perhaps never was — a guarantee of long-term financial security.

So what does the financial diary of an American family look like today? This #FinHealthMatters Day, we thought we’d show you. Here’s a chapter from our book that illustrates just how out of reach the American dream has become for many of us.


A Hidden Inequality

The afternoon was perfect — 75 degrees and clear, not too hot and not too cold. But Becky Moore was complaining about the weather. This was the kind of weather she said was “killer” on her husband Jeremy’s paycheck. Jeremy, 38, worked full-time as a mechanic, repairing long-haul trucks on the evening shift, earning a commission for each truck he fixed.

Jeremy’s biggest paychecks came during the hot weeks of summer. The heat burns out truck tires, and Jeremy spent most of his summer shifts patching them. Icy chills weaken batteries and alternators, and the winter months brought big paychecks too. But during the fall and spring, Jeremy’s take-home pay could be as low as $600 for two weeks of full-time work. The mechanics on the day shift kept busier, and Jeremy complained that there often wasn’t much left to do when he arrived at 2. Some mild-weather days, Jeremy had only one truck to work on during his entire eight-hour shift. For Becky, 34, the uncertainty of that weighed heavily, and it was only October. “I’m thinking that two weeks from now it will be crap,” she said, imagining Jeremy’s next paycheck.

Fixing trucks on commission means that Jeremy, and not just his employer, bears the risks of weather, slow days, and business ups and downs. In the heat of July, Jeremy took home $3,400 after taxes — in March he took home about half that, $1,800. Now, October was threatening to be as bad as March.


Becky stood at the kitchen table, dressed in jeans, a T-shirt, and flip-flops, folding laundry in neat stacks as she talked. Her time was tight with Jeremy working the evening shift since she had to manage the household by herself. “It’s hard on me mentally because I’m doing the sports, meals, school. So I have to do everything. And,” Becky paused with a tight smile, “it’s hard on him.”

While the kids were at school, Becky also volunteered at a local animal shelter and sometimes worked cleaning neighbors’ houses. Most of the family budgeting fell to her, and her large green wallet was stuffed with receipts. Given the uncertainties of Jeremy’s paychecks, Becky wasn’t sure whether to pay her mortgage yet. The payment was not due for three weeks, but Becky already had the money in hand. Still, she was wavering. “I want to make sure I have enough money on hand, and I don’t know what my husband will bring home this paycheck.” She started talking herself into writing the check: “I just want to get it done.” But then she decided to wait. Becky knew her bank account was almost empty. If she spent her remaining cash on the mortgage and Jeremy’s next paycheck turned out to be as small as she feared, she would have to borrow from her older sister to make ends meet. Becky had borrowed $200 from her not long before when Jeremy’s paycheck was short and they had needed gas for their minivan. “That right there was $75 alone,” she said.


The story often told about financial success in America is that slow and steady saving over a lifetime, combined with consistent hard work and a little luck, will ensure financial security, a comfortable retirement, and better opportunities for one’s children. But that is not Becky and Jeremy Moore’s experience. The 2016 elections brought to the fore how frustrated so many Americans are about the fact that this is no longer, or never was, their experience either.

The often-told story is rooted in a world in which the norm is to gain education, move to better jobs, reach peak income in middle age, and then retire. Researchers call this basic arc the “life cycle,” and it captures the life stages for which teachers and financial educators try to prepare students. The idea underpins nearly all advice on managing wealth and how families should save and invest over time. The advice to young families like that of Becky and Jeremy is to prepare for major life events early on: to start saving for a down payment on a house and to begin steadily saving for retirement. Later, as earnings rise, people should pay down their mortgages and set aside more for retirement. In this world, slow, steady, disciplined adherence to a budget and savings plan promises to conquer financial challenges. In the past fifty years, mastering the stages of the life cycle has become synonymous with being financially literate in America. And helping families achieve life cycle goals drives hundreds of billions of dollars of government support for housing, education, and retirement.

Assuming that everyone can follow this trajectory is dangerous. Becky and Jeremy don’t have the luxury to focus much on long-term plans. Without basic economic stability, their choices are often difficult, and they’re forced to make them frequently. Short-term imperatives undermine long-term goals. Saving and borrowing need to be recalibrated with the spikes and dips of their income. The consequences of bad decisions can compound, and quickly. Stress and anxiety make it all harder. Seeing that, it’s hard not to question basic assumptions about financial literacy and what governments and businesses should be doing to serve working families.

Excerpted with permission from The Financial Diaries: How American Families Cope in a World of Uncertainty, by Jonathan Morduch and Rachel Schneider. The book is based upon research performed by the US Financial Diaries (USFD) project. The USFD project is a joint initiative of NYU Wagner’s Financial Access Initiative (FAI) and The Center for Financial Services Innovation (CFSI). Leadership support for USFD is provided by the Ford Foundation and the Citi Foundation, with additional support and guidance from the Omidyar Network. Additional support for #FinHealthMatters Day and USFD was provided by the Citi Foundation. Learn more here.

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