Someone may be poor because his earning is low but there are people who are poor because they spend too much without necessity. Is it allowed to give zaka'at to the latter group of people?
As per Quran 9:60:
إِنَّمَا الصَّدَقَاتُ لِلْفُقَرَاءِ وَالْمَسَاكِينِ وَالْعَامِلِينَ عَلَيْهَا وَالْمُؤَلَّفَةِ قُلُوبُهُمْ وَفِي الرِّقَابِ وَالْغَارِمِينَ وَفِي سَبِيلِ اللَّهِ وَابْنِ السَّبِيلِ ۖ فَرِيضَةً مِنَ اللَّهِ ۗ وَاللَّهُ عَلِيمٌ حَكِيمٌ
Zakah expenditures are only for the poor and for the needy and for those employed to collect [zakah] and for bringing hearts together [for Islam] and for freeing captives [or slaves] and for those in debt and for the cause of Allah and for the [stranded] traveler - an obligation [imposed] by Allah . And Allah is Knowing and Wise.
The Uelma have traditionally interpreted this verse as identifying the following eight categories of Muslim causes to be the proper recipients of zakat:
- Those living in absolute poverty (Al-Fuqarā').
- Those restrained because they cannot meet their basic needs (Al-Masākīn).
- The zakat collectors themselves (Al-Āmilīna 'Alaihā).
- Non-Muslims who are sympathetic to Islam or wish to convert to Islam (Al-Mu'allafatu Qulūbuhum).
- People whom one is attempting to free from slavery or bondage. Also includes paying ransom or blood money (Diyya). (Fir-Riqāb)
- Those who have incurred overwhelming debts while attempting to satisfy their basic needs (Al-Ghārimīn).
- Those working in God's way (Fī Sabīlillāh).
- Children of the street / Travellers (Ibnus-Sabīl).
If the person(s) you refer to fall under one of these categories than they are eligible to receive the money as we truly do not know what is in their hearts and how much of what they spend is wasteful expenditure.
On the other hand, if you have more than one option to distribute your zakat to, it is recommended to give it first to the closest in relation to you and then to the most in need of it.
Inshallah Allah will give you hidaya to make the right choice. And since your niyah is pure, you will inshallah be rewarded for your kind deed.