Taking loans have become one of the easiest ways to get money. Nowadays the loans are unsecured, meaning you do not need to offer your valuables as collateral for a loan. With a competitive market, interest rates are relatively low, giving flexibility and choice of using the money the way you want.
Here are some situations that one should never take a loan for:
1. Paying Rent
Ever heard about ‘living within your means?’ Yes, there is a thing such as that. As young people, we are caught up wanting to live big and end up complicating our lives just to fit in. Loans are supposed to add value to life not stress you out, if you clearly know that living in certain places will make it strenuous for you, then live in a house that you can afford.
2. Betting games
Betting has increased in popularity in Kenya. While most of the young people have involved themselves with the betting games, which is a good thing, some have gone to extremes of creating debts, forcing them to get loans. Remember, the betting is supposed to be for fun, so do not take it seriously and go all in with your money. Bet what you can afford to lose. Betting never guarantees you winning, it’s a 50/50 game, so play wisely.
Going on vacation is not a necessity. It is wise to plan and save for it, to finance your beach holiday. If you have the need to get a personal loan to finance take a vacation, then that in itself is a red flag that you are facilitating something you clearly cannot afford. There are interest charges that are involved, so when you keenly look at it, you are paying more than you need to for the vacation, something that is not worth it.
4. Christmas Gifts
During the festive season, you may want to go all out and buy friends and family extravagant gifts. If you have to buy gifts, ensure you can afford it. Getting a loan to get chrisms gifts, doesn’t make any financial sense. Be wise and keep away for unnecessary loans that could jeopardize your financial freedom.
5. Getting things to show off
Most young people want to be admired, envied and want to be the center of attraction. That always comes at a cost. Most young people have taken loans, to buy things like cars, TVs, home theatre, clothes, watches and many other luxurious things just to fit in. Know who you are and be satisfied with what you have. It is better to work for whatever your heart desires than to take a shortcut and get a loan you cannot afford.