No, I don't think you're reading it wrong, Monika. I think Annie Proulx is saying that Ennis did spend what money he had, instead of saving it.
Where it went is a good question, especially before he got married and the kids came along.
I would extrapolate that he spent it on his horses, which I think would be a luxury for a ranch hand, and keeping the beat-up old truck running. I believe that in general the rancher would supply the horses for working the ranch. Certainly, he didn't need horses to be on a road crew. He would have needed the truck to get to work and back, though.
Otherwise, I don't know where it went, besides his family. Not on himself - not clothes. Later on, he doesn't even have a decent winter coat.
Was the creel case a gift from Alma?
Movie Ennis says he quit jobs to be with Jack early on - that would have made money less in supply. And I think that's what led Alma, at least in part, to take the job at Monroe's.