I used to think this was intelligence related, like less intelligent people were not able to understand how to maintain positive savings (spend only what is possible after contributing to savings).
But with age I think rationalization is the more powerful force that outweighs intelligence. I notice that people who struggle with money usually have powerful convictions that are silly and capricious, but they are unable to see that. They build arguments upon rationalizations instead of facts or data. Spending money on rationalized things makes perfect sense in their mind.
I think it's a three-circle venn diagram of knowledge - intelligence - rationalization. You can accrue a lot of knowledge via rote memorization, but it doesn't mean that you are intelligent. And you can have limited knowledge of a subject, but somehow "just get it" which comes with intelligence. And finally, you can have intelligence but utterly fail to see beyond rationalizations.
You're talking about emotions. Rationalization is the end process of abusing your intelligence to serve your faulty emotions, rather than understanding and interacting with your emotions so that it serves you rather than the other way around.
But with age I think rationalization is the more powerful force that outweighs intelligence. I notice that people who struggle with money usually have powerful convictions that are silly and capricious, but they are unable to see that. They build arguments upon rationalizations instead of facts or data. Spending money on rationalized things makes perfect sense in their mind.
I think it's a three-circle venn diagram of knowledge - intelligence - rationalization. You can accrue a lot of knowledge via rote memorization, but it doesn't mean that you are intelligent. And you can have limited knowledge of a subject, but somehow "just get it" which comes with intelligence. And finally, you can have intelligence but utterly fail to see beyond rationalizations.