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How to live a Debt-free Lifestyle in Nigeria

Debts are unavoidable in today’s Nigerian and global economies, as the general tendency to incur debt is very high. Debts have caused and will continue to cause a great deal of embarrassment in the present and in the future, hence the need for this topic.

This post will teach you about debts, how to avoid them, and how to live a debt-free life.

To begin, we’d like to learn the definition of debt in order to gain a better understanding of the subject.

What is a Debt?

Debt is defined as anything borrowed, primarily money, from another person with the promise to repay, with payment sometimes accompanied by interest.

Types of Debts?

There are several types of debts, but this article will focus on the two most common ones, which are;

  1. Secured Debts
  2. Unsecured Debts

Secured Debts: These are debts that are backed by properties or assets, i.e. collateral, that the borrower can take if the debtor fails to repay his/her debt within the timeframe specified.

Unsecured Debts: These are debts that do not have any securities, assets, or collateral backing them up. These debts are incurred based on the credit profile of the debtor.

How to avoid Debts?

There are a few things you can do to stay out of debt.

  1. Make certain that you only spend what you can afford.
  2. Keep track of your spending and make changes if you find yourself overspending.
  3. If you are having difficulty paying your bills on time, seek credit counselling.
  4. Ensure that you are properly managing your finances and that you have a plan in place in case you need to file for bankruptcy.
  5. Know When You Can Pay Off Your Debts
  6. Create a Budget
  7. Start Saving Now!
  8. Avoiding Bad Habits

Conclusion

In conclusion, it’s important to understand how to manage your money so that you don’t end up with too much debt. The sooner you start saving, the better off you’ll be.

Written by Kelly Vibes

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