Factors like naivety, lack of control, and low financial literacy have made many people bankrupt. When the number of debit alerts on your phone is 5 times the number of credit alerts, there are chances you’re spending on the wrong thing.
With the low-interest rates and relatively easy access to credits that most fintech companies now push as their unique value proposition, people now amass more credits than ever.
The sad news is that instead of investing the money in ventures that brings high dividend, people mostly spend the money on convenience, online shopping, streaming services, food away from home, etc.
Research by Statistica highlighted that 42% of millennials complete online shopping transactions on the smartphone.
In this post, you’ll learn about the 5 mistakes that can make you bankrupt.
1. Living beyond your means
WhatsApp and Instagram Marketing have forced many into impulsive buying. Just by viewing your contact’s WhatsApp status, you subconsciously fix yourself into buying things that you don’t need.
To avoid going bankrupt, you must be disciplined enough to overlook the products displayed on WhatsApp statuses, Instagram, and other similar platforms so you don’t fall prey to the buying addiction.
And before you purchase anything, double sure that you think it through carefully, and know that it’s really something you need rather than mere wants.
2. Not having an emergency savings
You will easily go broke if you don’t have some money saved. Sliding into someone’s DM to ask for 3k or 5k won’t cut it any longer, besides how many people do you want to ask for before you appear to people as an unserious person?
So have emergency savings, this could be between 300 to 500k, which you know you can easily pull from should you have an emergency. Also, note that this fund is not for the unnecessary purchase of items but your basic needs like food, house rent, and internet data for productive work.
3. Engaging In Bad Investments
You’re very close to going broke if you make the wrong investment decisions. Sadly, many Nigerian youths have seen betting and Ponzi schemes as investment opportunities.
Well, those are not good investments.
To avoid becoming bankrupt, the best investment to put those few extra thousand nairas in is to start a low capital business or look into low-risk investment opportunities like real estate, federal government bonds, and treasury bills.
4. Having No-budget
You can easily go bankrupt if you don’t plan your spending. There wouldn’t be a monitored way of identifying where your money is going if you don’t have a budget.
Having a budget is no-rocket science, it doesn’t entail you keeping a long note or automating a spreadsheet, by simply channeling your income into percentages, you can create a budget for yourself.
Apportion your income in the following ratio: Basic spendings (50%), Personal spending (30%), and Financial goals (20%). This way, you know how much you’re spending on each of your needs, and you ensure that you don’t cross your spending limits.
5. Partying A Lot
Many youths have gone bankrupt because of peer pressures, the fact that someone declares that the waiter serves everyone in the club doesn’t mean you should too, who are you impressing?
Most impulsive buyings of fashion items also come from people trying to “fit in” -particularly during outings. And since the rest of your friends use an iPhone and its other accessories, you deem yourself fit for it, meanwhile, your family background and income strength can not accommodate it.
If you carefully avoid these mistakes, you’ll be able to take control of your expenses and stay financially buoyant even in the face of this inflation and economic instability.
And it is in such good hands that you should think fast on how to access funds that you can set into working for you through investments.
CashDrive provides the required finance so you can take hold of the opportunities around you, whether is starting a business or an investment.
Our products include:
- Car owner loans – available to registered car owners.
- Car finance – available to car buyers.
- Business loans – available to existing businesses.