No one likes to owe money; well, most people don’t. However, the current world economy is making debt part of our culture. Even Nigeria owes 107 trillion naira to the outside world. But this doesn’t make owing any fun or comfortable, especially when your income struggles for survival. Debt management and repayment are crucial if you want to live debt-free in Nigeria in 2024.
In this article, we explore ways to get out of and avoid debt completely in 2024.
Why People Get Into Debt
As previously mentioned, most of us want to live debt-free, but many owe a loan app, a family member, a friend, or the bank. The major reason for this is the economic challenges in Nigeria; most people’s incomes can’t meet up.
However, there are other reasons why people get into debt: Living lavishly, buying things they don’t need, addiction, and trying to impress people who may not like them, among other poor choices.
How to Avoid Debt In 2024
There are tips to help you avoid getting into debt in 2024. While these tips are important, having the right financial mindset for a debt-free living is more important. With a faulty mindset, these steps won’t yield any results. Understand your current purchasing power, and be content with what you are now as you build your wealth.
Now, here are the tips to stay out of debt:
1. Know your Pocket
How much do you earn in a month? Are there any special bonuses? Do you plan for money you haven’t received yet? Do you have outstanding debts? How many bills are you paying in a month? Having the answers to these questions is important. Know how much you are worth so you can set your spending limits.
2. Have a Budget and Stick to It
Don’t touch a kobo out of your income until you draw up a budget. It is advisable to have a budget up before your monthly income comes in. Budget everything, from essentials like food to non-essentials like clothes. If you are having problems sticking to a budget, remember that peace of mind is more important than any frivolity you want to engage in.
3. Save to Be Safe
For many people, it is their savings that are saving them. Set aside a percentage of your income for rainy days and investments. Have money-saving techniques that can help you. Most financial gurus will advise saving ten per cent of your income but you can start with one per cent. Jollof+ has even made saving easy, safe and rewarding—you can automate your savings, and earn 21.6% on your money and no one can tamper with it because Jollof+ only releases your savings to your BVN-linked accounts. Start saving today and protect yourself.
4. Live Below Your Means
Focus on building wealth and sustainability. Live beneath your means. Spend on quality that is not too expensive, and avoid unnecessary expenses. Always choose the financially prudent options and stop spending a fortune to impress people who don’t even know who you are.
5. Have a Side Hustle
The best defence is offence. To avoid getting into debt, make more money. There are many side hustles you can add to your main source of income. You can also upscale and land a high-paying job, which increases your income.
6. Have Financial Literacy
There is an art and science to money; learn it. Learn about money management, saving skills, budgeting, stocks and shares, personal finance management, household budgets, and couple finance, among others. When you understand money, you will never run out of it or be in debt.
7. Borrow What You Need
If, for some reason, you need to borrow, borrow the barest minimum only. Also, have a repayment plan before you borrow and pay it back as soon as possible.
How to Get Out of Debt Quickly
Although you are in debt for one reason or another, it is vital to have a debt repayment plan to help you get out of it quickly. Follow these steps to get out of debt quickly.
1. How Much Do You Owe?
List all the debts you owe, including the interests, payment dates, and other relevant information. I know it might be uncomfortable to see the amount you owe, but knowing will help you plan better and get out of debt.
2. Have an Effective Debt Repayment Plan
How much of your income are you taking out to pay your debts? Have a repayment plan. You can use the debt snowball method, which involves paying more money on smaller debts first and the minimum on the other debts. Or you can use the debt avalanche method, which involves paying more on the debts with the highest rates and paying the minimum on the rest. Just have a plan that works for you and your finances.
3. Avoid Taking More Loans
Except in the rarest of cases, don’t take on more debt. Focus on living the right way and stick to a bare-bones budget that prevents you from spending recklessly.
4. Have Savings or an Emergency Fund
Yes, it is hard to save when you are paying debts but savings can prevent you from going back into debt. Saving is important in debt management. You can also take up a side hustle for extra income. Jollof+ app is the best app to save mooney in Nigeria, with the app, the economy doesn't have so much effect on your money. This will help you have enough to save and repay debt. Start wherever you are but be consistent about your savings.
5. Have an Accountability Partner
Debt repayment is not an easy journey, Having an accountable partner can prevent you from making more mistakes, keep you on a repayment plan and guide you into making the right financial decisions. The accountability partner has to be someone you trust and respect and who is financially intelligent.
In The End
My dad used to say, ‘Those who go borrowing, go sorrowing.’ I know you don’t like sorrow. The economy is not smiling but making financially sound decisions can help you thrive and build the wealth you will be proud of.
