How about "Why engineers in the Bay Area pay 1 million for a 600k condo" or "Why smart people pay 400k for a 150k education."

Fundamentally, the high price of the couch is really a reflection of the risk made in the "loan." Americans are too leveraged and don't save enough across the board. If credit were harder to come by, and the majority of loans were made with the expectation that the borrow would actually pay off the loan, you wouldn't end up with 4k couches. Also, I would imagine the apparent need to keep up with the Joneses would be diminished because fewer people would be driving the proverbial rent-to-own Mercedes.

I have a friend who is pretty well educated in a non stem field and is decently successful (lower middle class).

We both drive the same car that is currently worth 9k (a car which he shouldn't have gotten either, but I digress).

We spent an hour the other day debating why he shouldn't buy a brand new 22k car that will save him 900 per year on gas.

For the life of me I just couldn't get him to see why the best decision financially was to drive his current car into the ground.

His argument was literally, in 10 years my new car will be worth more than yours. I was dumbfounded - I could not get him to see that it was coming at a cost of an additional 13k up front. He said it in a "haha got you! - you forgot about that!" kind of way.

I just gave up.

At what point do we just admit that no matter the education level, no matter the background, some actors in the economy just won't make the most prudent choice?

In most of the USA housing is a choice between spending $500 to $1500 a month and building equity or spending the same amount while not building equity. Obviously building equity is typically better even at a loss than spending the same amount for nothing assuming you don't plan to move frequently, etc.

This is in no way, shape, or form comparable to a couch. A shelter must be had. A couch is 100% a luxury, and there are loads of substitute goods, like bean bag chairs, or just plain cushions on the floor. Not to mention that all of them are mostly worthless used (unlike a house).

Even when you aren't explicitly financing something, people throw away huge sums of money all the time when there are cheaper alternatives. For example, how many of us pay rent for housing?

For non-optional things like shelter, this is harder to navigate. What makes people scratch their heads about a sofa is that strictly speaking, you can get by without a sofa. It's an optional purchase. It sucks not to have one, but there's no "sofa" in Maslow's Hierarchy of needs. My parents in law come from a culture where sitting furniture is a completely optional item for example (Korea) and most people sit and sleep on the floor perfectly fine.

I remember when I was first married, my wife and I were really desperately poor, for at least a year we didn't have any furniture at all. Even after we stopped being poor I don't think we bought a sofa for the first 4-5 years of our marriage and then it was a triple discount coupon holiday sale sofa. 10 years later we still have that sofa and have no plans to get rid of it any time soon.

Money's great, it can almost instantly eliminate all sorts of inconveniences, and easy access to more money than you can effectively manage is a real problem. Even relatively smart people, given absolutely free money (like lottery winners) don't know how to deal with it.

I was raised in a family of four with an anual income around $14,000 a year. Today, I'm an engineer with a base salary in the six figures. I can tell you first hand, wealth gives you not just the ability to do more but the ability to make the money you do have go further.

It's not the $4,000 sofas that strain poor people to the financial limit. It's the hot water heater you have to put on a credit card instead of paying cash. It's the groceries you pay twice as much for because you can't afford them in bulk. It's the overdraft fees that make a $100 mistake into a $500 one. It's the nickle and dime medical bills because you can't afford to address the root cause of an affliction.

Or is the cost of doing business where 9/10 people default (mostly because you charged them too much) just that high?

You can substitute sofa with iphone, designer clothes, BMW, etc.

I kept thinking about this and got very emotional over it. So I came up with a quote: Wealth is a beauty nurtured in savings so keep the choices you make on how much you use limited to your priority needs.

Perhaps the tips in Reddit's /r/frugal can be made into a book and freely distributed to such people?

There's an immense amount of money being spent on such folks, much of it from taxpayer dollars and it still isn't very effective at lifting them from the vicious cycle of poverty.