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To: LLCF who wrote (58675)	1/17/2001 2:06:32 PM
From: Ilaine	Read Replies (1) \| Respond to of 436258

Do both parents need to work? Or do they have higher expectations for material goodies than their parent did? In many cases, a second job doesn't even put the family ahead significantly. >> "A second wage-earner seldom puts a family ahead financially," insists Henry Brock, president of the American Financial Resource Center, Inc., and author of the book "Your Complete Guide to Money Happiness" (Legacy). Brock, whom Money magazine named one of the nation's top financial planners, maintains: "It's essential that people understand the true economics of a two-income family." You may be adding only pennies, not dollars, to the family piggy bank. "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 the second spouse was only contributing $12,000 a year to the family budget," says Brock. After consultation, these married physicians decided one spouse would stay home with the children while the other was freed up to work about three extra hours per week, which made up for the lost $12,000 income. Which spouse was freed up? It doesn't matter, according to Brock. In fact, they can take turns if that is what pleases them. One can work a few years and then the other can take over as the breadwinner. It really depends on who has the best chance of earning the most income outside the home. For a realistic look at the impact of a second wage-earner on a family's financial profile, Brock advocates you 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. So if the first working spouse already is in a higher tax bracket, the second spouse will be paying taxes from that higher bracket no matter how little he or she makes. • Increased FICA and Medicare taxes: Even if a second working spouse earns a fairly minimal amount, 40 percent 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, which will increase as a result of the second spouse working. • Increased expenses: These include a second car (which you would probably need anyway if you have children), 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 prepared meals, increased child-care expenses and having someone to help with the housework. According to Brock, "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.<< cjonline.com usnews.com