Tell SD this riddle "I never lie. I was lying when I said that" 

now just replace "never lie" with "have no money"

I have had various relations, not just the SKs, exhibit this behavior.  Smh.  All you can do for SD is listen, make non-judgmental remarks and perhaps ask her, what would you do?  It's good that SD is observing and discussing.  It will take huge self control for you not to give your opinion, if you do, SD will probably be defensive.  But if she can talk about it and think through various alternatives, that would help her in the future.  We both know BM won't change.

I see my skids trying to understand, as well. HCBM has plenty of money to pay a lawyer to harass DH, to buy a new Jeep and jack it up with new wheels and things, and to take vacations constantly, but not enough money to buy more than two outfits for SS16 or to keep food in the house for SS almost 12. 

My response is always that as parents, we make sure that we have the money to take care of the things that are most important to us, and then I change the subject.

On a more serious note, the simplest way to explain it to SD is that Beaver has money. Just like you have money. And both of you have things you need to spend money on and things you want to spend money on. You don't have so much money that you can buy everything on both lists. Beaver has chosen to not flush the loo so she can dine out. Beaver has chosen to spend money on fresh flowers instead of cable. You'd prefer to spend the money on cable and running water. But you just don't carry on and moan about not being able to afford fresh flowers every day like Beaver. 

I think some people don't understand money. I really think they just don't get it. Personal finance should be a required class in high school. Budgets are a thing! Many people just are never taught and can't grasp the concept of not acting on spending impulses. 

I would send her a Dave Ramsey book- just mail it with no return address LOL maybe she will get a clue. 

It is unbelievably frustrating, having a friend who, despite being blessed with a high IQ, is a fool with money. I loaned this friend $20.00 to buy necessities (milk, bread and cereal) and she spent half of the money on a Vogue magazine. The next time that she was short of cash for food, I insisted on picking up and delivering the groceries, rather than watching the money squandered on foolishness.

Priorities.

LMAO. Sounds like our BM. To DATE, the Skids don't own a computer because according to her,  she never had any money to buy one. You know, the 10.5k she received every year in CS wasn't enough for a computer. Her feeble attempt to coerce DH to buy one for SD went nowhere. She even had her mother call DH and beg him to buy SD a laptop, a request he dutifully ignored. She did have money for 2 vacations a year, designer handbags, shoes and plastic surgery. But she didn't have money to buy her kids what they needed for school. Oh well...not our problem.

I think that the 20 years that DH was with her, they always had money so she didnt really have to hustle at all. She made a decent amount and he did also, so she never had to think about it.

She likes her fast food = $$$

She doesnt have internet ?

She cannot afford a 2 bedroom apartment but went to disneyland and Hawaii.

BUT somehow she has figured out how to keep not working for the past almost 3 years...

Being brought up by my British upper class mother who bought us underwear for Xmas taught me the difference between wants and needs. She will spend on quality that will last for generations but not on rubbish. 

Ahhh yes. Necessities versus wants.

One of my earliest interactions with ET was at a Boy Scout event for the boys. ET marched up to DH during the event and stated he needed to pay $80 (which was a lot for DH at the time) for books and patches and whatnot for the boys.

Not even 5 minutes later she lifted up her shirt to show DH her new belly button piercing.

Similar has happened over the years. I expect similar to happen again.