How did Betsy lose all her savings in Lyddie?
Betsy uses the money she earns to put her brother through college. The little extra she has put away is drained when she becomes ill and must have medical care.
Betsy's brother is "the son and heir" of the family, and Betsy thinks it is only right that he should have a good education. She herself is extremely intelligent and dreams of going to Oberlin, which was one of the first institutions of higher learning to accept women, once her brother has graduated. The long, hard working hours at the mill and the harsh conditions there ruin her health, however, and it is not long before she develops a wracking cough that produces blood. Betsy applies for a position in the drawing room, where the environment is less grueling, but her transfer comes too late. By the time she is moved, she is too ill to work. The boarding house mistress, unwilling to accept responsibility for her, orders Betsy to leave, and the doctor pronounces her too weak to travel to her uncle's house in Maine. Betsy is removed to the hospital, because of her condition, and because there is nowhere else for her to go. By springtime, her health is slightly improved, and her uncle comes to fetch her, but by that time, her savings are gone, used for medical expenses.
When she leaves for Maine, Betsy vows to return so that she can earn enough money to pursue her own dream of going to college. Lyddie knows, however, that Betsy will never again have the strength "to work in a mill thirteen, fourteen hours a day" (Chapter 14).