Assessing the Benefits of a Second Income

Taking a class on personal finance right now and learning loads of interesting information...


Here is a summary of a table that was found in my textbook helping to analyze and asses the benefits of a second income:

1. Second Income
	Annual Earnings		30,000
	Value of benefits (Life Insurance)		300
	Total 1		30,300
2. Expenses
	Federal income taxes (25% x30,000)		7,500
	State/Local income taxes (6% x30,000)		1,800
	Social Security Taxes (7.65% x30,000)		2,295
	Transportation and commuting (50 wks x$40)		2,000
	Child care (8 mos after school only)		3,200
	Lunches out (50 wks, 2x$10/wk)		1,000
	Work Wardrobe (dry clean too)		1,200
	Other work related expenses		300
	Takeout food for dinner (too tired; $100/mo)		1,200
	Guilt complex purchases (make up for time lost)		600
	Total 2		21,095
3. Net Value
	Total of 1		30,300
	Subtract total of 2		21,095
	Total net amount of second income		9,205

Total of the year comes to be $9,205/ 12 is about $767 extra each month... interesting how objectively the world also comes to the same conclusion that perhaps it is not cost efficient to have a double income. Things to think about!