Some of the most common reasons for being broke stem from sudden, potentially unforeseeable situations, such as medical expenses, theft or uninsured accidents, that damage personal assets. As of 2014, medical costs cause the largest portion of personal bankruptcy filings, even with health insurance.
Loss of a job, poor or excessive use of personal credit, and student loans also contribute to overall levels of debt and monetary constraints. Those closer to the poverty line are more likely to have issues with money constraints. As of 2011, 60 percent of those claiming bankruptcy earned $30,000 or less. Those who have some college education are at higher risk for monetary issues, as the burden of student loans combined with fewer high salaries associated with a college degree increases bankruptcy risks.
Stagnation of household income can contribute to monetary problems, making it difficult to save for emergencies, as prices for utilities, food and other basic needs increase when wages do not. Divorce can also be a very expensive drain on resources; legal fees, division of marital assets and child custody can all contribute to someone being broke. Poor financial education in schools can also contribute to poor personal budgeting issues, reflecting in individuals with spending issues or bad budgeting skills.