Since we are talking about savings and cost of living, I thought it would be interesting to share "hero to zero" stories that you have seen. I'd imagine anyone working in finance has seen at least a few cases of some dude overextending himself financially and blowing up after a wrong turn in their careers. I'll start, since I've seen a fair number of personal blow ups during the GFC.
I met this guy, let's call him Vladimir, in 2010 when someone asked me to put his CV to a firm I was working for at the time. He was in his early 40s, with a wife and 2 grade-school age kids. I don't recall his education, but I think it was a top-10 MBA.
In the early 2000s he got into agency MBS trading at some mid-grade dealer. Obviously, at the time, everything linked to real estate was red-hot. At some point, he moved to a fixed income hedge fund running a "hedged mortgage carry" strategy and taking home somewhere from 750 to 1.25. All of that came to a halt in 2008 when mortgage rates decoupled from the treasury rates and he blew up. Having run a very similar strategy myself, I can speak at length about the merits and drawbacks of the strategy (if people want), but that's outside the scope here.
To be honest, there would be nothing special about that story if not for his personal spending habits that lead to a proper death spiral. While his wife was also in finance, she was some sort of a risk analyst and he was the bread winner of the family. He sent his kids to LF at the cost of 60k/a, rented a 3,000 sqf apartment on the Upper East Side. He had two cars, an Aston Martin convertible for fun and a Lexus SUV for the family outings. All parked in Manhattan - the garage costs alone were probably enough to support a small African country.
It does not end there - in the mid-2000s he bought a huge coop in Brooklyn (sic, or was it Queens - I don't recall) that he started renovating. That's where things turned south - somehow, he got into a conflict with the coop board and the renovation was halted. All that while paying a 2 million dollar mortgage and common charges plus the legal fees for fighting the coop boards. He felt he could afford it. After all, he was a hot-shot PM trading the hottest instruments, it was a drop in the ocean.
In 2008 the fund let him go. Whatever savings they had set aside went very quickly - between the 8k per month on rent, 10k for the kids school tuition, 2k for the garage the bleed was real. Add to it a mortgage on his coop that he could not even sell since it was gutted. He eventually got a job as a sub-PM at another fund, but the managers felt that the guy is too leveraged to make good decisions and he was let get after 6 months. A few months later he was forced to declare bankruptcy. Last I heard, he was living in Washington DC working as a litigation consultant for some law firm.