I’ve always believed that just earning a high income doesn’t mean you have any idea on how to manage it.
In fact, it could be the opposite because you have so much more disposable income to burn.
Looks like I was partly right, because Time magazine reports that the Highly Educated Have [the] Biggest Debt Problems!
A new study finds that highly educated Americans were most likely to take on unmanageable debt in the pre-crisis years.
What’s more, gross personal financial mismanagement occurred across the population and not just in the mortgage market and not just among the unsophisticated.
Sherman Hanna, professor of consumer sciences at Ohio State University says: “People who piled on debt may have been too optimistic about their economic future, but you can’t blame that on a lack of education. People with college educations may have thought they were immune to any economic problems.”
Looks like I can amend the following statement:
Earning a high income and/or having a college degree doesn’t mean you have any idea on how to manage your money.
Oh wait, but I already wrote a post on this — a college degree doesn’t necessarily mean that you have any skills. Silly me.
If you want more proof of this, you can read my good friend AP’s post on her high income earning brother being totally inept at handling his cash flow.