I can completely identify with this. My father (and my mother, to be fair) was "penny wise and pound foolish". My siblings are still like this. I think it comes, in part, from generations upon generations of poverty, of not having much, and certainly not the "good life", as you've said. That stuff messes with a person's head, so they try to do as you say, escape reality momentarily through outwardly fancy things. Those things become valued by other members of the community as status symbols of a sort, and the cycle continues.

I could almost write an entire article on this phenomenon and how it affected my father. He literally killed himself with excess and died with nothing of value at 64 despite having had a decent job.

I've been bad with money most of my life, unless I'm broke as hell. When I'm broke, I can make a gourmet meal for 4 out of a hot dog and 2 cans of whatever. When I have money, well, it doesn't last long. That being said, I've been getting better and am determined to break the cycle.