The Key to Financial Imprisonment
September 12, 2007 by Pinyo.
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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- Sep 14, 2007: My first credit card and the fallacies | Moolanomy
- Sep 16, 2007: Sunday Money Roundup - Summer Is Over Edition. | My Two Dollars
- Sep 17, 2007: Carnival Of Personal Finance #118: Fun Money Facts Edition
- Nov 2, 2007: What My School Didn’t Teach Me About Credit Cards (GP) | Moolanomy
- Nov 12, 2007: 10 Reasons to have an Emergency Fund | Moolanomy
- Feb 27, 2008: What is Debt-To-Income Ratio (DTI) and Why Does It Matter? | Moolanomy
- Mar 12, 2008: From Financial Imprisonment to Financial Independence | I've Paid For This Twice Already...
- Apr 2, 2008: The Cost Of Instant Gratification | Moolanomy
Financial imprisonment! A term for what I am. Woohoo!
I am hoping my road from financial imprisonment to financial independence is, although long, very boring. lol
I am sure you will be fine on your journey to financial independence. After all, you have your blog to help you.
I was very careful with my credit cards for about the first 10 years, but by 2002 it can become overwhelming and i had to file bankruptcy. It was the last thing I wanted to do, but with no job at the time that was really the only option. I have this time kept a tight leash on my spending, and rarely use my cards at all, now with a few exceptions.
@CCR - welcome to Moolanomy and thank you for sharing your story. Yes, going into debt is a really hard detour. I am glad you got everything back in order.