It’s easy to pass the buck so to speak. We have become used to passing on blame to others for our problems. It’s easy to blame weight gain on the fact that there’s so many fast food joints around. It’s easy to blame poor financial habits on the abundance of  spending options available to us. Today we will not be playing the blame game. It’s now time that you take full accountability for your finances by understanding why you are broke:

Reason #1: You have no income.

Either you have no income or you simply don’t make enough money. This is usually the main reason most young people are broke. The obvious reason is that most college students claim to not have enough time to work. The quick solution to this is to start your own side business in college. If you don’t have the entrepreneurial spirit, you can always apply for a part-time job around campus. You won’t make a fortune, but at least you’ll have money coming in to prevent you from going broke. If all else fails you can check out online jobs for college students.

Reason #2: You spend more than you earn.

There’s just so much stuff out there that we want to buy. Every time I walk into a clothing store I feel like losing my mind because I fall in love with everything I see. Spending more than you earn can spell a financial disaster for you. At first it may only feel like you have a few dollars on your credit card. As you begin to spend more than you earn that few dollars can end up being a few thousand dollars. Add a few years to the mix and you’re in massive debt because you chose to spend more than you earn. I’m not here to preach to you guys. I just hope that this serves as a wake up call if you find yourself in this situation.

Reason #3: You follow every single trend.

Following trends can kill your finances. I would love to buy the new iPhone 4 but I know that it’s not in my budget at the moment. Many people go into credit card debt early in their working lives because it seems like so much fun to follow the newest trends when it comes to technology, clothing, and even eating habits. The trick is to practice delaying your purchases. I will get the newest iPhone. Just not right away. I will buy it when I have enough money in my checking account to cover this purchase.

Reason #4: You think personal finance is a waste of time.

Many young people simply can’t be bothered to worry about their finances. Some will argue that they will earn lots of money after college, so they can rack up debt now and pay it off later. Others simply don’t care. I’ve had buddies scoff at me for writing about personal finance. What’s their strategy? To make lots of money and not have to worry about managing it. I hate to break it to you but that’s not how it works in the real world when you have expenses to pay for.

If you don’t at least attempt to think about your finances, you’ll never get ahead and you’ll only find yourself broke. You don’t need to track every penny or live like a miser. You just need to understand where your money goes and why it goes there. That’s all.

This list could go on, but I feel that if you take care of the four reasons above, then you’ll be on the right track to managing your finances well now and into the future. Don’t worry next weeks topic will be much more fun. Just needed to cover this important concept guys.

(photo credit: nesster)