Hello friends, I thought it would be useful to discuss attitudes to money and debt on my blog today.

As a lucky meld of both, I find the UK and Nigerian attitudes to these very different and quite similar in some ways.

The main differences:

One – Money seems to be a primary motivator for most Nigerians and there is no embarrassment about this. In the UK money isn’t deemed to be a primary motivator and there is an embarrassment to admitting one is into anything just for the money. Of course my view is that this is a cultural difference due to the relative wealth of the UK as a country. If majority of your basic needs (safety, food, water, shelter) are being met and there is a safety net in the form of the welfare state and a functioning fair society it can be perceived that one should aspire to more and the pursuit of money is deemed the basest of aspirations.

Two – Formal debt (borrowing from banks) isn’t deemed to be a negative in the UK, it is seen as a means to an end, to enable the purchase of big ticket items like a house, a car or even sometimes an exotic holiday. In Nigeria the idea of bank debt is seen as negative and the view is if you can’t afford something you shouldn’t have it. A prime example is how most people build their homes in Nigeria. The person starts by saving up for some land and money to build a fence to stop enroachers, once this is done the waiting starts. By year 5 the person now has enough money to build the foundation for the house and commences the build. Once the money runs out its back to saving and working for the next stage of the build, it can take up to 20 years to build your own home, sometimes you die before you have finished building the house, however if you are lucky enough to complete the ground floor, you move in and continue the build as you live in it if you require additional floors added.

The main similarities:

One – There is a an embarrassment regarding difficulty in managing ones finances and there seems to be an expectation that the ability to manage ones finances properly is innate with no requirement for discussion and education. It is automatically assumed that everyone knows what they are doing and any mismanagement of your finances is seen as an irredeemable personal failure and a negative personality trait.

Two – There is a conspiracy of silence around pay and remuneration which makes it difficult to ascertain if one is being paid fairly which enables employers to take advantage.

Three – A subset of individuals in both societies gain their self-esteem through the stuff their money buys them and use this a source of self-aggrandisement and showing off.

Based on the above I am astonished I developed a marginally sensible attitude to my personal finances. I had/have a strong aversion to personal debt, my view has always been I’d rather have zero than minus one. As I got older, I realised that living in the UK will be impossible without taking on debt, as a student, I took on student debt and a student bank overdraft facility which kept me  up nights with worry as I couldn’t understand how an unemployed student like myself could afford to service this burden. It did help that I didn’t have to pay the student debt off until I left university and got a job to pay off this debt. However, I did not feel I could get out from under the student overdraft I had and when I started to work my salary went straight into serving the overdraft facility and I basically lived in my overdraft and I felt there was no way out.

I think there in lies the trap, having a student (and sometimes even a grown up) overdraft is an insidious gateway to piling on more debt unless one is disciplined and focused on paying this down.

I learnt to manage my overdraft by opening another bank account for my salary to be paid into and then started reducing my overdraft on my student turned graduate account by making monthly payments of £50. By the end of the first year I had reduced by overdraft debt by 40%.

When I finally paid off my student overdraft at the end of the second year, I vowed to never get myself in that situation again……. until I got a credit card 10 years later.

Watch out for an update to this post on tips I have found effective in managing my personal finances.