A list of things you should never borrow money for

Some Nigerians have a habit of making very ridiculous financial decisions like borrowing money to fund a wedding. In 2009, Mazi Elekwachi (pseudonym) borrowed nearly 5 million naira from a now defunct bank to “arrange a proper burial” for his late father-in-law. This is something he later regretted because not only did he struggle to repay the loan, but he ended up losing his collateral.

Fintechs encourage reckless borrowing?

A loan can be a very delicate financing option. This is why I personally believe that no significant economic progress can be based on loans; especially when said loans are not properly planned and utilized. Interestingly, it has become very easy to borrow money in Nigeria today, largely due to the availability of many Fintechs offering fast loan services. This development encourages reckless financial behavior, especially among Nigeria’s young working population.

Loans should be used wisely

For memory, this article is not intended to serve as a campaign against loans. Undoubtedly, the loans have many advantages that have stood the test of time. As a financing option, one can count on loans to finance a new business idea for example. You can also use loans prudently to take advantage of short-term investment opportunities. Some parents even use loans to finance those of their children; after all, raising a child is a big investment. Similarly, loans can be used as a financial option of last resort in a given situation, provided all other appropriate options have been completely exhausted.

Note that the Holy Grail good personal finance management is to never spend beyond your means. Unfortunately, reckless borrowing can encourage reckless spending. This article is therefore intended as advice. Below are some of the things you should never borrow money for. Do not hesitate to consult your financial expert if you need further clarification.

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Don’t borrow to furnish your apartment

While the likes of Stanbic Bank IBTC offers rental loans, it is absolutely inadvisable to borrow money in order to furnish your apartment. As a general rule, it is not advisable to borrow money for expenses. Therefore, unless you are borrowing for the purpose of generating additional income or meeting a pressing need, you have no business borrowing.

If you can’t afford money right now, then your apartment can be furnished another time. The most important thing is to have a place where you can rest your head at night. Imagine all the interest that will accrue on the loan and the likelihood that you won’t even be able to repay when due.

Do not borrow to buy a car

It may fall on also controversial, as many Nigerians love the idea of ​​owning their own. Most high earners have also been known to borrow money to finance their car purchases. So you might be thinking of doing the same thing. After all, Sheki is known for offering some of the best car loans for Nigerians.

However, good personal financial management requires that you give up living a life of luxury based on credit. A car is not a basic need. So unless you’re buying the car to start an Uber business, save until you can afford one without a loan.

Don’t borrow to sponsor a leisure trip

In April of this year, kwikmoney sponsored an infomercial encourage people to borrow money to travel during the Easter holidays. The fact that some people actually bought into the idea couldn’t be more surprising! Holiday loans are financial pitfalls that must be avoided. You don’t know how to accumulate debt just to travel to a destination for a few days or a few weeks. Again, unless you can afford it now by paying for it, leave this Ibiza vacation on your to-do list for now. Your time will come.

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Don’t borrow to update your wardrobe

Without a doubt, it is important to be beautiful. After all, the first impression counts a lot as the saying goes. Also, the fact that we live in a superficial world means that we are constantly consulted according to the designer brand that I wear. But then, who do you think you are fooling when you borrow money to buy those expensive clothes? What would you gain if you wore Suite Gucci when your account balance shows “zeroes”? Let’s be financially prudent!

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Dear friends, do not borrow money to buy her the most expensive diamond engagement ring!

If your wife love you for who you are, she wouldn’t care if you went Katankowa Market to buy her an engagement ring. Love is all that matters, according to Diana Ross. I mean, think about it – why should you fake it just to impress your potential spouse? If she won’t accept the kind of ring you can afford to buy without borrowing, that should tell you a lot about the long journey you plan to start with her.

Don’t borrow money to have an expensive wedding

In a desperate bid to organize a wedding that will be trendy Bellanaija Weddings, some couples go the extra mile by taking on heavy debt. And the question I keep asking myself is, why would anyone even do that? Who are you trying to impress? Do you realize that very soon there will be dependent children? It’s not cheap to give birth to a child in Lagos, by the way. Let’s not even talk about school fees yet… Please don’t borrow money to plan a wedding. Thank you.

You should always worry about the proper management of your personal finances. Borrowing to spend is not a good way to manage finances. As Chu Achara (a banker) rightly noted, “it is never advisable to borrow money for any purpose other than investment or business”.

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