In Money

The smartest people are most likely the dumbest at managing their finances

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.

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Sherry of Save. Spend. Splurge.

Am my own Sugar Daddy. Am a millionaire at 36 after getting out of $60K of student debt in 18 months, a little over a decade earlier, using TheBudgetingTool.com. I have worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K with an average lifetime savings rate of 50%. I have 11 side incomes that are on track in 2020 to make me $50K - $75K. I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I am all about balance - between time and money, and also enjoying my money. I also post daily on Instagram @saverspender.

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Posted on September 10, 2014

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5 Comments

  1. ArianaAuburn

    Correction: zero is a number. A NICE number in this case:)

    Reply
  2. ArianaAuburn

    Not only is this true, but they are the first ones to complain about being in debt. And here’s the kicker: for some reason at social gatherings, my friends always like to ask EVERYONE in a group how much debt each person has. The looks on their faces when I tell them the word “zero” is priceless.

    Reply

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