Exactly.

I can point to plenty of extreme examples of rich people losing everything because of poor financial planning, such as lottery winners, sports stars, and trust fund kids. You can’t outearn a spending problem, and you can often outsave an income problem. Most millionaires are also frugal, and that is extremely interesting to me.

For example, my brother retired super early because he was extremely frugal, and now he lives on a pretty typical average income in terms of regular spending (though his house certainly isn’t typical). He’s a millionaire, but he lives on someone like $60k/year. Why? He doesn’t see value in spending more money, so he stopped working as soon as his savings growth outpaced his spending needs. He had a great job (actuary, eventually became VP), and he decided to retire at 40 after living in $50-60k/year or so and earning more than double that.

On the flip side, my cousin lives in a higher cost area than me and they’re in a single income household making a mediocre salary (social worker, so something like $70k in a higher cost area). They own a house and are on their way with retirement savings, and they do this while having four kids. Part of their plan is to live near family so they have free baby sitters, inexpensive vacation options, and someone to help with household projects. I’m guessing they spend about $50-60k/year just like my brother. They’ll probably work until normal retirement age and have a healthy retirement.

So I look at these examples and can’t help but think that money problems are often symptom of poor financial education or mismatched priorities, or both. Occasionally there’s a legitimate income problem, but if you’re making around an average income, it’s usually a budgeting problem.