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I’m writing this review at the same time of the month I become aware that my rent is due. It happens every month, but it creeps up on me all the same, and there’s a panic as I try to figure out if there’s enough money in my bank account to cover it. I want to check my account – but I’m terrified to do it. It’s the same feeling every single month, that dread and fear. I know I’m not in control. I also know that I’m not alone. There are millions of us doing this in the UK, and because of Jonathan Morduch and Rachel Schneider’s research following the lives of low- and middle-income families in the US, I know that there are millions of people across the Atlantic living with this fear and uncertainty too.

I really enjoyed this book, although I didn’t think I would. I find it hard to shake the feeling that the research and writing of social policy wonks and economists like these authors always seems so distant from everyday reality. This book, however, didn’t feel like that at all. I felt very close to Morduch and Schneider’s respondents, who wrote financial diaries every day for months and years. Their diaries recorded what they did and spent every day, and this book not only highlights the connections between finance and families and their social lives, but also shows how society works. Via these first-person accounts, you experience along with the families the devastation when an appliance breaks down and you haven’t budgeted for it, or the sinking feeling of knowing your child’s birthday is coming and you have to compensate and cut something essential from your budget for a party or a gift.

These diaries are not just financial records but emotional ones too, and it is here that the book’s greatest strength is apparent: there is nothing cold or hard about these finances. These are the finances of everyday families, rather than of the poorest people on welfare who are too often the focus of social scientists. Instead, we have a mix of people, including a family who between them have five jobs, and a man who works full time but sleeps on his mother’s couch because his job doesn’t pay him enough to be able to move out. Morduch and Schneider’s research shows that there is something very wrong here: in this case it’s the US economy, but it translates easily to Europe. The commonality is uncertainty.

Chapter headings take us through what many of us experience each and every month: “Earning”, “Spending”, “Smoothing and spiking”, “Saving”, “Borrowing”, “Sharing”, “Sometimes poor” and sometimes “Secure and in control”. The methodology of diary writing is not new in the social sciences, but the way that Morduch and Schneider present the data – aka people’s lives – shows just how complicated household budgets can be for the millions of us who live pay cheque to pay cheque. The book concludes that we have clearly entered a new economic reality where even people with qualifications, skills and work can no longer be guaranteed baseline financial stability. Morduch and Schneider make a clear and persuasive argument that blame should not be put on families for the way that they manage their finances in times of such instability and uncertainty…and in an age when the wage just don’t fit.

Lisa Mckenzie is research fellow in the department of sociology, London School of Economics, and author of Getting By: Estates, Class and Culture in Austerity Britain (2015).

The Financial Diaries: How American Families Cope in a World of Uncertainty
By Jonathan Morduch and Rachel Schneider
Princeton University Press, 248pp, £22.95
ISBN 9780691172989
Published 11 April 2017