Why do so many people have money problems?

I think the reasons people have money problems can vary depending on the individual. For some people, it’s caused by circumstances that were difficult to manage, but for many others, they’re caused by personal choices. For the sake of simplicity, I would like to focus on the group who have monetary problems due to decisions being made well within their power. For this group, I believe the answer is simple: they live beyond their means and manage their money poorly.

The most irresponsible person I have ever met with their money was a friend of mine I had in Japan. He came from a comfortable background and came to the country with no real money management skills. Basically, having never lived a life where he had to worry about having enough money, and never managing his own money, hurt him greatly in his life here where he had to manage his own limited amount of money. He would complain to me often about his money problems and it was frustrating for me to listen to because his problems were all caused by very poor spending decisions that could be easily solved. Furthermore, I was always shocked by how carelessly he spent his money when we went out together. He bought many unnecessary things and spent large amounts of money on luxuries he could do without.

Once, when we were talking about travelling in Japan and he said he wanted to do it more often and asked me for advice. I said he could take a highway bus instead of using the bullet train, but he said he would not sacrifice the comfort and convenience of the bullet train and his leisure time. On another occasion, when he asked me to help him manage his groceries, I was stunned when he listed his food necessities, and he listed bottled water as a necessity. I asked him why he didn’t drink tap water in Japan if it was safe just like in the US, but he answered that he had never drunk tap water and that he wasn’t going to start. It was at that point where I felt he was hopeless. In the end, he hit a rough patch and he found his inability to manage his limited amount of money too difficult and he gave up and went back to the US to live with his mother. It’s a strange case to think about because we had the same job and even though it was difficult to adjust to life with the amount of money we made here, it was not impossible, and all his difficulties were caused by him wanting to live beyond his means.

Generally, though, I think it’s safe to say that the reason why this group of people have difficulty managing their money is because they want to live beyond their means and they have poor money management skills. I think I fall somewhere in the middle. If I could give any advice to these people it would be advice I was given by my brother, who always said life is about investing, or from my other older sister who lives by the rule to always live well below your means because the comfort you sacrifice is temporary but the payback is great.


live beyond one’s means (idiom) – to spend more than you earn; to live in a financially unsustainable way
comfortable background (idiom) – growing up in an environment that provides well
sacrifice (verb) – to give up or forgo something you want (usually to have a preferred outcome)
stunned (adjective) – very surprised or shocked
hit a rough patch (idiom) – to enter a difficult situation