Why Many Nigerians Struggle with Financial Discipline

Financial discipline is a very important attribute which people may have but at the same time is also the hardest to put into play, in particular in Nigeria. Many Nigerians at large, across all age groups, educational levels, and income brackets have issues with consistent financial management, to which they stick to budgets, or they fall to extra expenses. This issue isn’t always as a result of carelessness or low intelligence. Rather it is a product of a mix of cultural, economic, psychological, and structural issues that play a role in how we as a people think and deal with our money.

In large part what we see as a issue of financial discipline in Nigeria is the unstable character of income for many of its citizens. In some countries salaries are more predictable and employment more secure which isn’t the case in our country. Many Nigerians work in the informal sector, run small businesses, or have what we may term insecure employment. When income is irregular it is difficult to plan. We see a trend where money is spent as soon as it is received because there is no certainty of what the future brings. This in turn creates a cycle in which earnings are quickly used up which leaves little for save or for which to do long term planning.

The economy also plays a large role. We see high inflation, increasing prices of products, and fluctuating exchange rates which in turn makes financial planning hard. As the cost of living goes up people tend to spend now as opposed to saving for the future. Also it is the case that with the price of living going up people put their money into physical assets instead of the naira which they see to be devaluing over time. This issue of currency depreciation in turn does not encourage financial discipline.

In the cultural fabric of things in Nigeria we see a very strong thread of generosity, family responsibility, and communal support. These may be very fine values but also present great challenge to financial discipline. Many young professionals are put in the position of supporting extended family members, paying for siblings’ school fees, or participating in community events. To turn down such responsibilities is to court guilt, criticism or social outcast. Thus people often overextend themselves financially in an attempt to live up to social expectations.

Lifestyle issues at large, which include social media, are a factor in financial unsustainability. In platforms like Instagram, Twitter, and TikTok we see very curated pictures of luxurious living, expensive clothes, and grand parties. Many in Nigeria report they feel they have to put up a certain image which they are not able to support with their income. Thus they find themselves making impulsive buys, going into debt, and putting image before financial security. We see in many that the want for success as it is portrayed online outdoes the want to actually build wealth.

In many aspects of life what we see is a gap in financial education. In Nigeria many schools do not include in their curriculum lessons on budgeting, saving, investment, or debt management. Thus students leave school with little to no base in personal finance. They may have had instruction on how to get money but not on how to best use it. Also without that which is proper in financial matters, it is easy for them to make bad choices like impulsive spending, taking out too many loans, or not putting in place plans for the future.

Psychologically we see that which plays a large role in finance. In Nigeria many people use spending as a way to ease emotional pain. After a tough week at work or in times of hard life issues people may turn to shopping, eating out, or partying to feel better. This emotional spending becomes a habit which in turn breaks financial discipline. Instead of looking at money for what it’s meant for long term security — many see it as a source of short term comfort.

In many cases we see the scarcity mindset play out. In which many Nigerians are brought up in very limited financial settings this in turn causes a fear of running out of money when cash does come in. This in turn causes a propensity for immediate spend over saving. People feel that if they don’t put that money to use now they may never have that chance again. While that is a reasonable thought given the economic climate we see that it also leads to what may be poor financial decisions.

Debt is also becoming a bigger issue in Nigeria which we see with the growth of loan apps and easy credit. Many people are taking out loans without doing due diligence they use the money to fuel their lifestyle expenses instead of savings or basics. What we are seeing is a cycle of taking on more debt which in turn requires more repayment which in the end leaves people with no financial discipline at all. Instead of growing wealth we have a situation where individuals are working to pay off their debts.

Lack of which is a factor in many issues. In Nigeria we see that which is a product of short term thinking. This is in part a result of economic instability and in part of low financial education. People tend to put out which are related to basic needs like rent, food, transport instead of into savings, investment, or retirement. This in turn causes them to not develop good financial routines.

Family experience and bring up also play a role in financial behavior. We see that which which grow up in environments of poor money management may play out the same issues in adult life. Also if parents did not practice saving, budgeting or investing, their kids may not consider these actions as key. But at the same time we see that those brought up in a financial responsible home are more likely to adopt the same practices.

In many cases the Nigerian economic structure does not put value on saving. Also many financial institutions report low interest rates which in turn makes bank savings unattractive to the public. Also we see high fees and lack of faith in the financial systems which in turn dissuades some from using formal savings. When trust is an issue people are to keep their money in cash or they spend it immediately.

Another issue is the pursuit of easy money. In many cases Nigerians are geared towards getting rich quick which is via risky investments, gambling, or speculation. This philosophy does not foster patience and discipline. Instead of a slow and steady path to wealth, people go after instant success. When these schemes fall through they go back to bad financial practices instead of learning from what went wrong.

Peer pressure also plays a role in financial health. If a person’s friends are large spenders they may feel the pressure to do the same. At social events, parties, and in general life which friends live large is what is put forward as the norm which in turn causes people to spend beyond what they can afford. Also over time what is accepted as normal in terms of finance in social groups is more of a waste.

Despite what we see at present, we note that financial discipline is a reality for many Nigerians. We see that awareness is the base for change. We see that which elements play into spending patterns is recognized by the individual thus allowing for more aware decision making. Also we see that in which one puts effort in to learn personal finance, sets out that which is to be achieved financially, and creates a practical budget this greatly improves money management.

Putting away for a rainy day is also very important. What we do is to have some money set aside for the unexpected which in turn reduces the tendency to spend beyond what we should or to get into debt. Also even small and regular savings can bring a sense of security and improve overall financial health.

Reduc to social and structural pressure and we see also that redefining what success is all about. Instead of in terms of material things, in Nigeria we put forward financial stability, personal development and long term achievements as bases for success. Surround yourself with financial responsible people which in turn will have a positive influence and motivation.

Developing self discipline and emotional intelligence is of equal importance. What we see as needs as opposed to wants which in turn affects our purchasing decisions we should identify. Also we may do better to find healthier outlets for stress like exercise, hobbies, or meditation which in turn will reduce emotional spending.

In the end financial discipline is a matter of patience and consistency. Change does not come over night. We break out of old habits and into new ones which take time. But with commitment, education, and determination many Nigerians may see better personal financial health and a more secure future.

In the long run what we see in terms of financial issues in Nigeria is not an isolated issue; it is a reflection of larger economic, cultural, and social issues. To turn this around we require personal effort as well as systemic change. Through better financial education, improved economic stability, and promotion of responsible money management Nigeria may see a future in which greater numbers of its citizens are financialy disciplined and secure.