The Financial Diaries: How American Families Cope in a World of Uncertainty

This sharp-eyed, sympathetic study from Morduch, a public policy and economics professor, and Schneider, a financial services company vice president, has a compelling new angle on the effects of long-term financial instability on working-class families. The authors’ focus is on cash flow and how it can reveal instability that’s not otherwise obvious from simple income information. They designed the titular financial diaries by recording a total financial picture for each of 235 households in five states: dollars earned, spent, and received in government entitlements. The study shows how cash-flow uncertainty prevents people from sticking with long- or even short-term financial plans. Using the narratives of a handful of survey respondents—including a casino card dealer and a performing arts teacher—the authors discuss various coping methods: saving, borrowing, and drawing on communities and networks. They also examine how pervasive financial uncertainty drains people’s time and energy, citing a 2014 survey in which 92% of respondents said they would prefer economic stability to extra income. This is a must-read for anyone interested in causes of—and potential solutions to—American poverty. [em]Agent: Ted Weinstein, Ted Weinstein Literary Management. (Apr.) [/em]