In a tale as old as time, Olayinka Adeyemi’s quest for a better life led her from the quiet charm of Ondo State to the bustling metropolis of Lagos in 2023.
Embarking on a journey for greener pastures, this 26-year-old visionary soon found herself balancing the scales between ambition and financial reality.
After settling in with friends, she landed a role as a marketer in a tier-one bank.
Despite a good paycheck, Olayinka’s bank account did not reflect her earnings, confusing her and sparking endless conversations with her circle of friends about her unending financial woes.
Within the office walls, whispers of her mounting debts began to paint a less-than-flattering portrait of her financial irresponsibility.
The turning point arrived when a colleague confronted Olayinka about yet another loan request.
The loan request opened the path for a hurtful conversation that would linger in Olayinka’s consciousness long after the words were spoken, forcing her to confront the consequences of her financial habits head-on.
“It is not an experience I will forget in my life. The way she spoke to me was as if they had conspired against me and she was just waiting for me to come to her. I learnt my lesson that day,” she said.
Even though Olayinka shared her story with Saturday PUNCH sincerely and with remorse, she might not fully grasp that she may be the reason for her financial struggles.
Being broke in Nigeria is a common experience for both employed and unemployed youth.
However, some individuals seem to go through this phase more frequently than others.
Despite the tough economic conditions, experts suggest that with proper money management, people can avoid constantly being broke.
Here are some reasons why you might find yourself always short on funds.
Reckless financial habits
Financial experts have noted that many people who claim to be broke are often materialistic and spend more on things that do not have sustainable values.
This, they said, is one of the most common reasons why people do not have money saved for daily survival and even emergencies.
A financial planner, Ifeoluwa Adegoke, said exercising bad financial habits can wreck your financial health. “Habits like reckless spending, gambling, indiscriminate online shopping, and other similar habits can cripple the financial health of anyone,” she added.
Unending black tax
Spending on family, also known as black tax, without planning, is one of the fastest ways to stay broke.
A finance and wealth creator, Jennifer Okpechi, said black tax is a major constraint for every high-earning member of any family.
She said, “Supporting family members financially regularly contributes to financial strain and makes it difficult for you to save, invest, and build wealth.
“To fulfill their obligations, oftentimes, you will prioritise family and forego opportunities for career advancement that might require you to relocate or gain knowledge through additional learning.
While it is important to support your family financially, experts advise that doing so frequently and without limitation will endanger your finances quicker than you think.
Struggling low-paying job
Another reason why you are always broke is because of your job.
If your job does not offer much in terms of monetary compensation but you spend almost all your time working, you may continue to struggle financially.
This, experts agreed, means feeding from hand to mouth.
Adegoke said, “Not earning enough money to meet basic needs can be a valid reason. With the high increase in the cost of things in the country, earning a low income can make it almost impossible not to always be broke.”
Jack of only one trade
Okpechi noted that having only one source of income can be risky considering the current economic realities in the country.
She said, “Having only one job is risky, especially without a proper financial plan or budget. It is easy to overspend and live beyond your means.
“Effective financial planning involves setting goals, tracking expenses, saving for the future, and creating multiple sources of income.
“Your 9-to-5 job is often subject to factors beyond your control, such as company downsizing, economic recessions, or shifts in industry demand. Losing a primary job can lead to immediate financial hardship when there are no other alternative sources of income.”
Faking it till you make it
When you embark on the fake-it-till-you-make-it journey, you are very likely to commit to spending lavishly on frivolities which eventually keeps you broke.
“Fake it till you make it” is a phrase that suggests acting with confidence and behaving as if you are successful, skilled, or experienced in a particular area, even if you are not yet.
The idea is that by projecting confidence and competence, you can influence others’ perceptions of you, and over time, you will develop the skills, experience, and success you initially pretended to have.
“You care about what people think so you live above your means because you are trying to impress your friends and you want to match the lifestyle and material possessions of your neighbours to look like you have made it.
“Constantly comparing your financial situation and possessions to those of others can drive the desire to match or surpass others’ standards of living. This is an easy way to become broke and strapped in the cycle of living from paycheck to paycheck and can even lead to debt,” Okpechi explained.
Too many investments
An investment coach, Opeyemi Ogundipe, said chasing too many investment opportunities will wreck your finances despite guaranteed returns on those investments.
He said, “You see a lot of people who, because of fear of losing out on opportunities, just jump on anything. As humans, we need to know that there is a specific amount of your investment and another specific amount that should go to expenditure.
“When something goes to expenditure, it means that the liabilities in your life like enjoyment, schooling, and other miscellaneous spending can be taken care of. But a lot of people take all the chunk of their money and put it into investment.
“So, they have investment but do not have spendable cash at hand. It might look like there is a greater good, but in the meantime, some of these people find themselves in terrible financial situations where they have to borrow and put their hands into things they would not ordinarily do.
“That is why they say there is a 50-30-20 per cent rule. 30 per cent of your income goes to investment and not all your salary. Investment should be carefully managed.”
Poor money management
According to Adegoke, your salary will not keep you out of being broke if you do not learn how to plan your finances.
“Lack of money management skills like budgeting and saving can cause anyone to go through financial difficulty regardless of the income bracket,” she said.
Experts agree that the choices you make play a crucial role in your financial health as they determine whether or not you struggle with being broke or enjoying a wealth of available resources.