A lot of people make certain financial decisions that affect their finances sooner or later. Loans are best used for creating a new source of income that will yield profit or generate more funds. Most Nigerians, however, put their financial security at risk by applying for loans to spend. Some take up huge loans to fund a party, buy ‘aso ebi’ or even buy things that are not needed urgently.
In the long run, they end up losing their properties to loan sharks and even their respect and dignity. Being financially wise helps you to make certain financial decisions. There are certain things you should not borrow or take loans to purchase or fund. Below are the things you shouldn’t take loans for:
1. A car
There is no doubt that cars are liabilities and not assets. Taking huge loans to purchase a car might not be necessary. Many Nigerians in the bid to own a car borrow money to finance their car purchases. This only means you are living beyond your means unless you are purchasing the car for a transport business. This will yield more income to finance the car bills and also personal bills. Having a personal car bought on credit shows lack of proper financial discipline because cars don’t appreciate. They depreciate in value and also require extra funds for proper maintenance.
It is now a norm for couples and their families to take loans to fund their wedding ceremony. This is because most couples want to achieve and have their dream weddings at all costs. They take up huge loans to finance this ceremony all because they believe that wedding ceremonies are a once in a lifetime occasion.
Taking huge loans to have an extravagant wedding will only make you experience huge financial embarrassment after the ceremony. The last way you want to start off a new marital journey is to be chased around with calls from loan sharks. Instead of applying for huge loans, find reasonable and creative ways to “cut your coat according to your material”. Make plans in accordance to your financial ability.
In a desperate bid to trend on social media blogs, some people go extra miles by taking up loans to fund a party. A lot of people do this to impress and satisfy people forgetting that the guests will only ‘chop and clean their mouth’. Some guests might end up giving you some token to celebrate you but it might not be able to cover up your debts.
Borrowing money to spend shows lack of proper financial discipline or management. Avoid taking loans to fund birthday parties, funeral ceremonies or even baby showers.
4. Fashion items
It is important to look nice, sharp and clean, but this should be within your budget. As a result of trends and quest for recognition, a lot of people take loans to buy expensive fashion wear. Borrowing money to buy expensive clothes, shoes, accessories and shoes will only put you in financial potholes.
Do not borrow money to buy Gucci slippers, Versace wears, or Louis Vuitton bags when your account balance is crying for help. You are only deceiving yourself by looking classy and expensive on credit.
5. Furniture or appliances
Borrowing money for domestic uses such as buying new appliances, repainting your house or furnishing your apartment is not advisable. Loans are meant to be taken for the purpose of generating more income or creating a source of income and not to foot bills.
6. Vacations or leisure trips
It is astonishing that a lot of people fall into financial traps by applying for holiday loans to travel to other countries. How would you even enjoy the trip knowing that you have a huge debt to tackle after the trip? Traveling to Jerusalem for pilgrimage, Maldives for honeymoon or other countries for vacation on credit is not a proof of wise financial decision.
If your financial ability can only fund a trip to Olumo rock or other tourist center, why not visit them till you are financially capable to travel overseas for vacation?
I hope you found this helpful. Make wise financial decisions today!
ALSO READ FROM NIGERIAN TRIBUNE