The Key to Financial Imprisonment

By Pinyo, on September 12, 2007

In my post “My first credit card and the fallacies,” I mentioned the term financial imprisonment. It is the opposite of financial independence, and I defined it as the state of having to work for money, living from paycheck to paycheck, and never having enough.

Photo from Wikimedia Commons

So, how can one become financially imprisoned?

From my perspective, we were handed the key to financial imprisonment the minute we became credit worthy. Credit worthiness allows us to fuel the need to spend more than we earn and create debt. This opens the door to financial imprisonment, and it can happen at any time. Some of these moments include:

• When a boy borrows money from his friends so that he can spend time with them. Somehow his allowance is never enough, but good thing he has generous friends. Or is it? In truth, he just opened that door which can lead to imprisonment, and started a bad habit that can last a lifetime.
• When the bully spends more than his allowance by taking money from all the scrawny kids.
• Or like most of us, when we get our first credit card

Even seemingly good debt can push as further along toward financial imprisonment. For instance, borrowing too much to go to school, buying too much house for your income.

However, credit worthiness is not at fault; it is just a key. It is how we use credit that can lead us to financial imprisonment. If credit is used responsibly, it can help us achieve our dreams — own a home, get a college degree, start a business, etc.

This article was featured in:

• The 118th Carnival of Personal Finance hosted by Money, Matter, and More Musings. For more information please visit the Carnival of Personal Finance.

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Pinyo is the brain behind Moolanomy personal finance blog and a few other web sites. If you like this article, please subscribe for free daily email updates.

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