by Joan Inong

Created on: September 01, 2009

If you want to be "cash rich," you have to know how to be financially independent and responsible. While financial independence may mean something entirely different to various people, it holds one universal concept which applies to all: it signifies that you are able to pay for a service or product with your own, real money. Financial responsibility involves the time after a purchase, when you are obligated to pay for your purchases. Many people use their credit to buy what they want, but using too much credit without handling financial responsibility results in bankruptcy or deep debt.

We have all been there before. We go to a store, we see something we like, it is expensive, and yet we still want to buy it. We know that we don't have the real funds to back up our purchase, but we know that we can sign up for credit and pay for the purchase later. However, many of us allow our purchase amounts to steadily increase over time, leaving us between a rock and a hard place when it finally comes to being financially responsible for our actions.

Most, if not all, of us don't want to be in the hands of creditors and collection agencies. We want to be financially independent, and know that we actually purchased something outright. But, when we are standing in the moment before purchasing something, we do not think about the consequences of using credit until we receive the billing statement later on. At that point, we may still be unable to afford the purchase. We repeat the same thing month after month, and soon we are up to our knees in debt.

Not only does this financial irresponsibility affect your credit score, but it also affects the overall quality of your life. Most employers check credit scores, and many high-end purchases require credit score checks. The consumer's responsibility goes beyond purchasing power; if he or she does not perform his or her obligation, the consequences will follow and they will have a detrimental effect on that person's life.

Clearly, it is better to wait until you have real money to buy something instead of using credit, or rather "fake money." Not only will you be able to live up to your financial responsibilities, but you will experience a type of financial independence of which most people now do not know or remember.

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