Financial Literacy
Top 10 things Nigerians spend their money on
Our needs in life are always reflected in our every day expenses. You spend your money on what you regard as important.
The small things we spend money on are however the ones that make the most dent on our finances because they tend to come as daily, weekly or monthly expenses.
Below are the top ten things Nigerians spend their money on that could be affecting their finances without them even knowing. This is based on Nairametrics research.
Airtime;
So many people go through recharge card like its water. I have a friend who claims she doesn’t spend much on airtime because she buys the N100 cards. Between you and me though, she buys at least 6 N100 cards a day. Airtime is top on the list because it’s something people purchase daily (except maybe those who buy larger units, they buy airtime like every two to three days).
Internet subscription; it’s very rare to see someone these days who is not on social media and it all boils down to internet subscription. The craze for Facebook, twitter, Instagram, and other platforms has amplified recently. You hardly see anyone without a smart phone or without internet subscription. Even secondary school students now have to do their homework on line causing parents to subscribe for their computers at home. Network providers make it all the more tempting by providing data plans that are easily affordable for everyone.
Cable subscription; we’d blame this on the ladies for their love of Telemundo and ZeeWorld but the guys are up the same alley with them for their love of sports and music (not to say there aren’t guys who watch soaps or ladies who watch sports; they just aren’t that common). Every other month, Nigerians spend money on cable subscription so they don’t miss out on their favorite shows. It’s become much of a habit; they rarely notice its impact on their finances.
“NEPA” bills; whether you are on the pre-paid plan or the post-paid plan, bottom line is that every Nigerian pays for NEPA bills (even those who don’t get to enjoy the power supply). A lot of people complain that the money they pay is not commiserate with the power they are supplied. Just last week, someone was complaining at a bar, that they hadn’t had light for 3 out of 4 weeks but were still charged very high with no consideration to those 3 weeks.
Fuel; if it’s not for your car then it’s for your generator but Nigerians spend money on fuel daily resulting in fuel stations stationed almost at every turn. Even the black market thrives especially for bikes and keke na pepe.
T-fare; commuting within the city is another way Nigerians spend money. For those who don’t own a car, you have to pay for a bus, taxi, and bike or ‘keke na pepe’ to take you to and fro anywhere; school, church, market, work, out of town. Car owners are not exactly free of this since they need to buy fuel/gas for their cars.
Gas; we’d say kerosene but you’ll agree with me that more people use gas cookers than they use stoves or firewood these days. Almost every household spends money on gas.
Water; people buy water everyday be it sachet water (pure water), bottle water or bore-hole water. It seems like nothing but what you don’t know is that all those N10 or N100 you spend several times a day actually adds up.
Soft drinks; this is common practice. People buy soft drinks everywhere; while stuck in traffic, at a park waiting for your bus to get filled, at schools, at hospitals, in a restaurant, even at your work place. Vendors happen to be everywhere and you can’t help but buy with the usual excuse of ‘I really need something cold to drink’. While it’s not good for your pocket, you should consider the fact that it’s not good for your health either.
Snacks; this goes without saying. Snacks are an accomplice to soft drinks. they almost always go hand in hand but the excuse for snacks is either ‘I’ve not had anything to eat yet’ or ‘I’m too busy to cook an actual meal’
While all these seem like necessities, it will be best if you apply caution. Work them into your budget and avoid impulsive spending at all cost.
What did we miss?
Personal Finance
5C’s of creditworthiness: What lenders, Investors look for in a business plan
Business owners need to be aware of the criteria lenders and investors use when evaluating the creditworthiness of entrepreneurs seeking financing.
Banks usually are not a new venture’s sole source of capital because a bank’s return is limited by the interest rate it negotiates, but its risk could be the entire amount of the loan if the new business fails. Once a business is operational and has an established financial track record, banks become a regular source of financing.
For this reason, the small business owner needs to be aware of the criteria lenders and investors use when evaluating the creditworthiness of entrepreneurs seeking financing.
Will the business that an entrepreneur actually creates look exactly like the company described in the business plan? Of course, not.
The real value in preparing a business plan is not so much in the finished document itself but in the process it goes through – a process in which the entrepreneur learns how to compete successfully in the marketplace. In addition, a solid plan is essential to raising the capital needed to start a business; lenders and investors demand it.
Lenders and investors refer to these criteria as the five C’s of credit.
READ: 5 ways to raise funding for your business
1. Capital: A small business must have a stable income base before any lender is willing to grant a loan. Otherwise, the lender would not be making, in effect, a capital investment in the business. Most banks refuse to make loans that are capital investment because the potential for return on the investment is limited strictly on the interest on the loan, and the potential loss would probably exceed the reward. In addition, the most common reasons that banks give for rejecting small business loan applications are undercapitalization or too much debt. Banks expect a small company to have an equity base investment by the owner(s) that will help support the venture during times of financial strain, which are common during the start-up and growth phases of a business. Lenders and investors see capital as a risk-sharing strategy with entrepreneurs.
2. Capacity: A synonym for capital is cash flow. Lenders and investors must be convinced of the firm’s ability to meet its regular financial obligation and to repay loans, and that takes cash. More small businesses fail from lack of cash than from lack of profit. It is possible for a company to be showing a profit and still have no cash – that is, to be bankrupt. Lenders expect small businesses to pass the test of liquidity, especially for short term loans. Potential lenders and investors examine closely a small company’s cash flow position to decide whether it has the capacity necessary to survive until it can sustain itself.
READ: How to scale as a small business on a budget
3. Collateral: Collateral includes any asset an entrepreneur pledges to a lender as security for repayment of a loan. If the company defaults on a loan, the lender has the right to sell the collateral and use the proceeds to satisfy the loan. Typically, banks make much unsecured loans (those not backed up by collateral) to business start-ups. Bankers view the entrepreneurs’ willingness to pledge collateral (personal or business assets) as an indication of their dedication to making the venture a success. A sound business plan can improve a banker’s attitude towards venture.
4. Character: Before extending a loan or making an investment in a small business, lenders and investors must be satisfied with an entrepreneur’s character. The evaluation of character frequently is based on intangible factors such as honesty, integrity, competence, polish, determination, intelligence, and ability. Although the qualities judged are abstract, this evaluation plays a critical role in the decision to put money into a business or not.
READ: 7 Ways to pay for your higher education
5. Conditions: The conditions surrounding a funding request also affects an entrepreneur’s chances of receiving financing. Lenders and investors consider factors relating to a business’ operation such as potential growth in the market, competition, location, strength, weakness, opportunities and threats. Another important condition influencing the banks is the shape of the overall economy, including interest rate levels, inflation rate, and demand for money. Although these factors are beyond an entrepreneur’s control, they still are an important component in a banker’s decision.
The higher a smaller business scores on the five C’s, the greater its chances of receiving a loan.
Written by Chukwuma Aguwa
Personal Finance
Don’t be fooled by COVID-related scams
Always consult the institution in charge of health-related matters to confirm any fishy information you come across.
The nature of and the manifestation of the Covid-19 disease is such that there’s only a little time available to remedy the situation before it gets chronic. Although the infection begins by exhibiting mild symptoms, if you do nothing in a short time, it could lead to death in a matter of days.
This whole picture has caused many to become desperate about Covid-related issues, launching into panic mode at the sight of any information. As a result, such people are not far away from falling for fraudsters.
With the different kinds of news flying around, you mustn’t be fooled by Covid-related scams.
The Coronavirus threatens the health of millions of people around the world daily, also killing thousands along the way. To curb the spread and remedy the situation, bodies like the CDC, WHO, and every country’s local health organisation like the NCDC, frequently circulate information around communities. However, it has also led to fraudsters taking advantage to provide fake news, and even asking for donations.
Each day, there seems to be a new account or NGO asking for donations into the health sector, and though some are legit, many are just fraudsters posing to take advantage of innocent citizens. So far, numerous complaints about scams have been recorded, especially with people who are looking to support the health cause in any way they can.
READ: Africa to spend $9 billion on Covid-19 vaccine, access to supply is big problem
Channels used for COVID-related scams
There are three major ways scammers take advantage of the haziness of the situation to dupe people. To start with, they appeal to the emotions of humans, who see the high death toll and suffering. As a result of what is happening, people have been willing to donate funds for medical supplies, isolation centres, and financial compensation for medical workers.
Scammers take advantage of this by posing as charity organisations and solicit for funds. Most times, as soon as their target is met, they clear their footprint without leaving a trace behind.
Another way they scam people is by manufacturing and selling fake or low-quality health products. Everyone wants to get their hands on a cure, or something that can at least protect them from the virus, and scammers are meeting their needs by providing just that.
READ: China joins WHO vaccine programme as it fills huge gap left by United States
The World Health Organization currently approves only one vaccine, and any other thing outside it is outrightly fake or just a supplement that will help your body. Currently, only the Pfizer vaccine is clinically tested and approved to work. Be sure to not throw your money in the wind by purchasing some of these fake drugs around.
Lastly, scammers create systems to extract a patient’s personal information, thereby having access to the person’s true identity. It could be in the simple form of opening a registration portal where you supply all your details.
Therefore, only give information to approved bodies and not any random online site that appears legit. These fraudulent individuals can do a lot of damage to your identity. Stay vigilant, only communicate with approved bodies, and always ask questions if you are not sure or suspect foul play.
The place of electronics in COVID-related scams
These fraudsters usually reach out to you through the digital sphere. Hence, watch out for cold calls, text messages, or emails requesting donations to certain bodies. The best way to confirm the legitimacy of such a message is to visit the organisation’s official website in a different browser. Never follow the link in the mail or text directly, as it can be easily embedded with spyware. Therefore, a single click could see them extract all your personal information, including bank details.
Also, please stay away from those who claim to have a cure, and accompany it with testimonies of people who have used it. They are low graders desperate for your money. Vet them by searching online and see what people are saying. In all, always look out for suspicious messages, and opt out if you are sceptical.
In a nutshell, you should not believe any cure, vaccine or supplement that the World Health Organization does not approve of.
Conclusion
The government or legit health institutions do not cold call citizens to request donations or coerce them into making one. If you receive a call out of the blues, chances are it’s a scam, which is why they mostly try to hurry you to donate before you realise it. Always consult the institution in charge of health-related matters to confirm any fishy information you come across.
