By: Larry MacDonald

F. Scott Fitzgerald, author of The Great Gatsby and This Side of Paradise, was a successful writer in the 1920s and 1930s who earned $500,000 (U.S.) a year in today’s prices. Yet he and his family could never seem to save despite concerted efforts to budget and “accumulate capital.”  William J. Quirk writing in American Scholar gives us a fascinating account of the personal finances of the great novelist, playwright, and short-story writer. Here’s an excerpt:

“At year’s end he was 100 percent over his $18,000 budget, having spent $36,000. How had he spent $36,000? Like others who try to live by a budget, Fitzgerald discovered that a lot of money had definitely been spent but didn’t fall into any category that budgets provide—there is “leakage.” Of course, in his case, there was more leakage than is customary. Fitzgerald and Zelda prepared what they thought was a complete record of what they had spent running the household—it came to $1,600 a month. Then they added what they had spent on pleasure, trips to New York, the theater, and so on; that came to $400 a month. Together that totaled $2,000, but Fitzgerald knew he’d spent $3,000. Fitzgerald asked, “You don’t mean to say that every month we lose $1,000?” It was impossible. “People don’t lose $12,000 in a year, it’s just missing.” Somehow a “mysterious third of our income had vanished into thin air.”

Hat tip to TaxDetective blog