Cancer cells can grow for years without being noticed. They spread to different parts of the body. Often, people don’t realize they have cancer until it’s too late.
Just like cancer, many people struggle with money problems but don’t notice until something bad happens. When they finally realize, it’s often too late.
Take Ayo, for example. He is in his late forties and works for an engineering company. Life was good until his company faced problems. They lost many clients and had to let people go.
Sadly, Ayo lost his job without a good severance package. This unexpected event was a big shock to him.
Ayo had worked for almost ten years at the company. Despite all those years, he didn’t have much savings.
Losing his job was the start of many financial problems for Ayo. He had to sell almost everything he owned to take care of his family. In 2020, many companies laid off workers due to the COVID-19 pandemic. Ayo’s story became common.
Like Ayo, many people have hidden money problems. Their current income hides these problems. But when something goes wrong, it all falls apart. Big expenses like medical bills or losing property can push people into financial trouble.
Financial problems are very serious. They can sometimes be a matter of life and death. In 2019, a Nigerian report showed that 99.4% of people had less than N500,000 in their bank accounts.
What would these people do if they needed more than N500,000 in a crisis? For example, if they needed a million Naira? Financial stability is not just nice to have; it is essential.
Five signs your finances are in trouble:
1. Little or nothing left after paying regular bills: Experts say you shouldn’t spend more than 50% of your income on regular expenses. For example, if you live in Lagos and earn N100,000, your bills like food, utilities, and transportation should not take more than N50,000.
If you spend more than that, you need to check your spending. Cut out unnecessary expenses.
2. Little or no emergency savings: What will you do when unexpected problems come? Do you panic and run around for help? Experts say you should save at least 20% of your income for emergencies.
Nobody hopes for bad situations, but life can be unpredictable.
3. Often needing help from family and friends: You don’t want to be that person who always borrows money from everyone. If you often need to borrow money, your finances are in trouble. Even if you repay on time, borrowing frequently is a bad sign.
4. Living beyond your means: For example, renting a house in Lekki costs about N3 million per year. Experts say your rent should not be more than 30% of your annual income. If Ayo rents such a house but only earns N6 million a year, he is living beyond his means.
It’s understandable that you want to impress others, but at what cost?
5. Having just one source of income: You’ve probably heard, “Don’t put all your eggs in one basket.” What happens if you lose your job? Even with a busy nine-to-five job, you can still invest your money.
However, remember that investments have risks. So, research well before investing. If you have extra time, consider side jobs like freelancing, blogging, or content creation. These can bring in more money for you.