Why dual income doesn’t always mean financial security

HAVING two incomes is no longer a guaranteed shield against financial strain. Households built around dual salaries face growing exposure to rising living costs and economic shocks.

Economists said expenses linked to childcare, commuting and lifestyle inflation often absorb much of the second income, thus weakening household resilience.

The issue, they stressed, is not the number of earners, but how family spending is structured.

Universiti Teknologi Mara senior economics lecturer Dr Mohamad Idham Razak said it is increasingly common for dual-income households to be more financially exposed than single-income families when their cost structures are designed around two pay cheques.

“In Malaysia, household debt levels remain relatively high and savings buffers for many families are modest. Even households with two incomes may struggle if expenses rise faster than wages.

"The key issue is not the number of earners, but whether spending commitments are calibrated to one income or stretched across two,” he told Sinar Daily.

He said in urban areas, a significant portion of the second income is often spent simply to enable the second earner to work.

“A substantial share of the second income can be absorbed by childcare or babysitting fees, commuting costs, fuel or public transport, work-related meals and sometimes higher housing costs closer to workplaces.

“While this varies by household, it is not uncommon for a large share of the second salary to go towards enabling the second earner to work, reducing the net financial gain more than many families initially expect," he said.

Idham added that lifestyle inflation is another major factor weakening household resilience, particularly when families take on mortgages, car loans and discretionary spending based on combined incomes.

“When financial planning assumes both incomes will always be available, households become structurally vulnerable. This makes them more sensitive to shocks such as job loss, illness or temporary income disruptions,” he said.

He noted that many Malaysian families lack adequate emergency savings, leaving them exposed if one partner loses a job.

In such cases, households may quickly turn to credit cards, personal loans or withdrawals from retirement savings, which weakens long-term financial security.

“Families that budget based on a single-income baseline and treat the second income as supplementary tend to be far more resilient," he said.

Beyond financial planning, rising living costs are also changing why more women enter the workforce.

“Rising living costs are likely to push more women to work out of economic necessity rather than pure choice. However, good policy design should preserve family choice by improving affordable childcare, flexible work arrangements and adequate wages," he said.

Ideally, families should be able to decide whether both parents work or one stays home without facing severe financial disadvantage, as this supports both economic participation and household well-being.

Meanwhile, economist Professor Emeritus Barjoyai Bardai said reducing household overheads, rather than simply adding income, is key to long-term sustainability.

“The long-term solution would be for one of the couple to stay at home,” he suggested.

However, staying at home does not mean they cannot be productive.

“They can work online and can actually be more productive. Today, some organisations have adopted this and their staff are doing their jobs very well," he said.

Barjoyai said rising costs for domestic help and childcare have also significantly increased household vulnerability.

He said vulnerability arises during hard times when one or both lose their jobs but still have operating family overheads to take care of without income.

“When the operating overhead is higher, the risk is higher. If families can reduce their household overhead, they become more sustainable," he said.

He added that the cost of raising children has climbed sharply, particularly in urban areas, due to rising maid and nursery costs.

“If you look at developed nations, they do not rely much on maids or expensive nursery systems. Families somehow manage childcare themselves, which helps control costs," he added.