Money Habits that will Leave you Broke in 2023


Admin  |  June 5, 2023

5 mins read

Managing your money effectively is crucial to securing your financial future. However, certain money habits can lead to financial hardship, especially in an ever-changing economic landscape like Nigeria's. 

In this article, we will explore some bad money habits that can leave you broke by the end of the year. By identifying and avoiding these habits, you can take charge of your financial well-being and build a more secure future.

1. Faking it till you make it:

As harmless as the idea of “Faking it till you make it” seems, it is one of the most common and detrimental habits. Especially for 20 something year olds. It's tempting to keep up with the latest trends or maintain a certain lifestyle, but overspending without considering your income can quickly drain your financial resources. Instead, strive for financial discipline by creating a budget that aligns with your income and prioritizes saving and investing.

2. Impulsive Spending: 

Let's be real with ourselves. There is nothing therapeutic about impulsive shopping. It’s just like every other high. It wears off in 5 minutes and leaves a big hole in your pocket. We know it’s hard to resist the urge so we made a mantra for you. Whenever the spirit of impulsive spending comes upon you, recite the following: 

I have enough clothes. 

There’s food at home. 

Shoes are not my problem. 

I have everything I need so I will not spend my money.

3. Neglecting Emergency Funds:

If the year has taught us anything so far, it is the intuition to expect the unexpected. In uncertain times, having an emergency fund is vital. Unfortunately, many of us overlook this aspect of financial planning. Failing to set aside money for unexpected expenses can force you into debt or jeopardize your financial stability. Aim to save at least three to six months' worth of living expenses in an easily accessible emergency fund to protect yourself from unforeseen circumstances.

4. Paying for subscriptions you never use:

You have a Netflix sub, you also have a dstv sub, but the latest movies are premiering on Amazon so you have that too just to stay updated. Let’s not also forget showmax that you’ve kept just incase. As much as this earns you an interesting personality, it doesn’t do well for your bank account balance. Prioritize your subscriptions and cut off the rest. It might not seem like much but when compounded, it can amount to the price of a pair of Nike sneakers.

5. Mismanaging Debt:

Debt is a double-edged sword. While it can provide opportunities for growth and investment, mismanaging debt can quickly spiral out of control. Racking up excessive debt, taking on high-interest loans without proper evaluation, or neglecting repayment obligations can lead to financial ruin. Before you know it, loan sharks are sending BCs to your Whatsapp contacts. Chelsea come on naww!

6. Ignoring Financial Education:

An interesting quote by Donald Miller reads “In a world of Information, ignorance is a choice”. Ignorance on financial education is a major stumbling block for many Nigerians. Without understanding essential financial concepts such as budgeting, saving, investing, and avoiding scams, you may fall victim to poor financial decisions. Invest time in educating yourself about personal finance through books, online courses, or seeking advice from professionals. This knowledge will empower you to make informed financial choices.

7. Overlooking Insurance Coverage:

Many Nigerians underestimate the importance of insurance coverage, be it health, life, or property insurance. We’ll rather cover ourselves with the blood of Jesus. As much as that sounds like a great plan, failing to protect yourself adequately against potential risks can have devastating financial consequences. Evaluate your insurance needs and invest in suitable coverage to safeguard your finances from unexpected events that could otherwise leave you financially vulnerable.

8. Neglecting Retirement Planning:

Retirement may seem distant, but failing to plan for it can be a grave mistake. Relying solely on government pensions or depending on children for financial support is risky. Start planning for retirement early by contributing to retirement accounts such as the Contributory Pension Scheme (CPS) or private pension schemes. The power of compounding can significantly impact your retirement savings over time.

9. Falling for Get-Rich-Quick Schemes:

Nigeria has unfortunately been plagued by numerous fraudulent schemes promising quick and easy wealth. Talk about MMM and the likes. Fun fact is Nigerians are still falling for these scams every other day. If it’s too good to be true, then it’s probably not true. Be cautious and skeptical of any scheme that guarantees unrealistic returns with little effort. Instead, focus on legitimate investment opportunities with a proven track record and cultivate a culture of saving. You can download the Bankly app to get started today and earn up to 12% per annum.

In this 2nd half of 2023, it's crucial to be aware of the money habits that can leave you broke. By avoiding these bad money habits, you can take control of your financial situation and build a more secure future for yourself and your loved ones. Remember, financial success requires discipline, knowledge, and an intentional approach to managing your money effectively.