After graduating from Texas Tech with a degree in accounting, Ruth Ann moved back to her hometown of Wylie, Texas, got a job, and married James, who was managing a carpeting and flooring store. First came a son, Dexter. Then, in 1997, Ruth Ann and James stretched and bought a modest three-bedroom house with a big yard for $84,000. Next, she had a daughter, Ellie, and the family was living the American Dream.

But it all unraveled quickly. A superstore opened a few miles away, and James was laid off after the 1999 Christmas season. Try as he might, James couldn't find a comparable position, and he resorted to a succession of odd jobs. By summer, Ruth Ann and James were two mortgage payments behind despite garage sales and borrowing from family. One night Ruth Ann saw the writing on the wall and told James they had to file for bankruptcy. Without saying a word, he walked outside, got in his pickup truck, and cried.

This true story comes from a sobering book about middle-class families called The Two-Income Trap (Basic Books, 2003). According to surveys cited in the book, parents with children at home are in ill financial health. As a group, these couples are two times more likely to go bankrupt than couples without children, and they carry an unhealthy amount of personal debt.

You would be wrong to suppose that adding a second paycheck automatically makes families financially secure. Granted the average two-income family in inflation-adjusted dollars makes 75 percent more than a one-income family a generation ago. But many of today's double-income families are straining to make ends meet. There is more competition for scarce housing in good school districts as well as tempting offers to take on more debt. Unless husband and wife ...