Generation Y are those people currently in their 20’s and 30’s, and by most accounts this entire generation segment is broke. Why is that? Emma Johnson put together an interesting article recently, with several video clips taken when interviewing a few Generation Y individuals, called “Why is Generation Y Broke“. While several of the video clips are quite humorous, it becomes sobering when considering the long-term effects of personal finance illiteracy.

If you fall into the Generation Y age category take heed of warnings from those who have gone before you. Getting a grasp on your personal finances is your responsibility, regardless of the example your parents set or the methods you learned growing up. In an era of easy credit being issued to anything breathing, it only takes a few money mistakes to impact years of your life. Gaining a little financial literacy could save you tens of thousands of dollars or more over your lifetime. Don’t put off increasing your financial IQ one more day. Get involved in your personal finances.

I read a lot of financial articles and books, but few really catch my attention like this one did. Why? Because of how true it was. Most financial articles candy coat the debt crisis facing many Americans by pointing to better “management” of the debt being needed, or “safer” debt instruments that could be used. This is the first main-stream, secular article in years to speak the truth about debt plainly. So with that preface, I’d encourage you to read the following article called “The Seven Deadly Sins That Lead to Debt” by Sheyna Steiner.

“Financial sinners won’t have to wait for the afterlife to be punished for their various misdeeds. Plenty of consequences await in the here and now. Presented with choices daily, human beings can lead chaste and charitable fiscal lives. Or they can succumb to fleeting temptations and fatal traps. So choose to commit these deadly sins — or work to bring a little temperance into your spending.” (click here for the rest of the story)

I read this article and thought it was a nice reminder of where a good portion of our money can go daily if we don’t give it an alternative home in advance. It is especially sobering to see how a few of these items can add up over the course of a year.

Top 10 Money Drains
(Thursday, August 16, 2007, provided by Bankrate.com)

It’s easy to fritter away money on daily expenses. If you fall into these money traps, learn to avoid them and pocket the savings.

1. Coffee
2. Cigarettes
3. Alcohol
4. Bottled water
5. Manicures
6. Car washes
7. Weekday lunches out
8. Vending machines snacks
9. Interest charges on credit cards
10. Unused memberships

1. Coffee — According to the National Coffee Association, the average price for brewed coffee is $1.38. There are roughly 260 weekdays per year, so buying one coffee every weekday morning costs almost $360 per year.

2. Cigarettes — The Campaign for Tobacco Free Kids reports that the average price for a pack of cigarettes in the United States is $4.54. Pack-a-day smokers fork out $1,660 a year. Weekend smoker? Buying a pack once a week adds up, too: $236.

3. Alcohol — Drink prices vary based on the location. But assuming an average of $5 per beer including tip, buying two beers per day adds up to $3,650 per year. Figure twice that for two mixed drinks a day at the local bar. That’s not chump change.

4. Bottled water from convenience stores — A 20-ounce bottle of Aquafina bottled water costs about $1. One bottle of water per day costs $365 per year. It costs the environment plenty, too.

5. Manicures — The Day Spa Magazine Price Survey of 2004 found that the average cost of a manicure is $20.53. A weekly manicure sets you back about $1,068 per year.

6. Car washes — The average cost for a basic auto detailing package is $58, according to Costhelper.com. The tab for getting your car detailed every two months: $348 per year.

7. Weekday lunches out — $9 will generally cover a decent lunch most work days. If you buy rather than pack a lunch five days a week for one year, you shell out about $2,350 a year.

8. Vending machines snacks — The average vending machine snack costs $1. Buy a pack of cookies every afternoon at work and pay $260 per year.

9. Interest charges on credit card bills — According to a survey released at the end of May 2007, the median amount of credit card debt carried by Americans is $6,600. Rate tables on Bankrate.com indicate that fixed interest rates on a standard card average 13.44 percent. Making the minimum payment each month, it will take 250 months (almost 21 years) to pay off the debt and cost $4,868 in interest. Ouch!

10. Unused memberships — Costhelper.com reports that the monthly service fee at gyms averages between $35 and $40. At $40 per month, an unused gym membership runs $480 per year.

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