The allure of easy credit can be a seductive trap, leading many Nigerians down a perilous path where financial obligations morph into profound emotional burdens. While loans are often seen as tools for progress, a critical misalignment between the loan’s purpose and the assets it’s meant to generate can unleash a torrent of stress, anxiety, and even debilitating depression. This isn’t just about numbers on a spreadsheet; it’s a deeply personal battle for financial and mental stability.
At its core, responsible borrowing means securing funds for ventures that create tangible value, assets that not only offset their own costs but also contribute to the repayment of accrued interest. Imagine a business owner securing a loan to purchase new machinery. This investment, if successful, generates increased output, leading to higher sales and profits, which in turn can comfortably cover loan repayments and interest. This is the ideal scenario – a virtuous cycle of growth and financial responsibility.
“In a nation grappling with its own economic challenges, it’s not uncommon for those who are meant to be resources – medical doctors or mental health professionals – to be facing their own financial struggles.”
However, a starkly different reality emerges when loans are primarily sought for the acquisition of liabilities rather than assets. This is often the case when borrowing for consumer goods – that latest smartphone, a new wardrobe, or non-essential services that offer immediate gratification but no long-term economic benefit. In these instances, the borrowed money doesn’t generate any income to offset the mounting interest charges. Instead, it creates a liability that solely adds to the burden of repayment. This is the genesis of loan mismatch, and its consequences can be devastating.
The psychological impact of this misalignment is often underestimated. The constant pressure of unpaid debts, especially when they haven’t translated into any productive or income-generating asset, can feel like an insurmountable weight. This relentless strain can erode mental well-being, leading to overwhelming stress, persistent anxiety, and a dark descent into depression. The very act of seeking financial assistance, intended to improve one’s situation, can paradoxically lead to a state of profound despair.
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The tragedy is amplified when individuals in distress find themselves unable to access effective support. The weight of mounting, non-income-generating debt can be so overwhelming that even professional intervention may seem insufficient. In a nation grappling with its own economic challenges, it’s not uncommon for those who are meant to be resources – medical doctors or mental health professionals – to be facing their own financial struggles. This can render them less equipped to provide the comprehensive support needed to navigate such complex financial and emotional distress. The system designed to help can, unfortunately, sometimes fall short due to systemic pressures.
Therefore, safeguarding one’s mental well-being and financial stability hinges on a proactive and discerning approach to borrowing. Every loan application should be an exercise in careful consideration and strategic planning. The fundamental question must always be: “What tangible, income-generating asset will this loan help me create?” If the answer leans towards depreciating assets or ephemeral consumption, a red flag should immediately be raised.
Directing borrowed funds towards assets that will generate income is not merely a financial strategy; it is a critical measure for emotional resilience. By ensuring that loans contribute positively to your overall financial health, you actively avoid falling into a self-perpetuating cycle of debt. This cycle breeds emotional turmoil, erodes self-esteem, and can have a cascading negative effect on all aspects of life, from personal relationships to professional performance.
Ultimately, responsible financial decision-making is intrinsically linked to mental well-being. Prioritising loans that contribute positively to your financial health isn’t just sound financial advice; it’s an act of self-preservation. It’s about making choices today that ensure a more stable and less emotionally taxing tomorrow. Be mindful, be strategic, and always remember that your mental well-being is a precious asset that no amount of borrowed money can truly replace.
Adeniyi Bamgboye, MBA, FCTI, FCA, FCCA, a dual-qualified chartered accountant, tax expert, and policy analyst, is the managing partner of Empyrean Professional Services, an audit, business, and financial advisory firm dedicated to enhancing its clients’ business value. 08060603156; adeniyi.bamgboye@empyrean.ng
