We take financial education for granted, but many in the bottom tier have no understanding of monetary management. They jump on the opportunity to spend the money because they lack the simplest comprehension of financial obligation and a balanced budget. This isn't to say their actions are valid, but rather to emphasize the dire need for financial education amongst our youth.
I don't think having no understanding of monetary management is strictly a bottom tier problem, the resent financial problems have exposed plenty of people in the middle and upper tiers as well. Lack of money management education is really a problem across the board.
Having an understanding and making smart decisions don't always go hand in hand. I suspect many people know what they are doing is bad for their financial health but simply don't have the will power to do the right thing in the near term because the adverse consequences only come years down the road.
I'm not sure how much of it is lack of financial education, and how much is a combination of peer pressure and general attitude in the nation. When everyone around you living off the debt, when "whole America is living in credit" is a popular truism, when banks pushing the cards and credits down and market them aggressively, it is easy to lure self into thinking that it's actually normal and how life is supposed to be. Because those banks wouldn't be throwing money at you if they knew it's wrong, and all those people with heavy mortgages and debts can't be wrong, right?
Education isn't a panacea. Most people who get into debt do understand the system, but choose to ignore their indebtedness.
I cannot remember where I read it, but the evo-psych explanation for this behaviour is that prehistorically most problems could be solved by hiding for the problem and waiting for it to go away.
