I was watching news the other day and the story of a young man from Meru, Kenya caught my attention. He had made a post on social media that he was ready to sell one of his kidneys. Reason: The lad had taken a loan from a local bank to lease a tea bush with the hope that the returns from that business would boost his income and enable him live a better life.
Problems started following him when at the end of the year, the tea bonus fell way below what he had expected. He found himself between a rock and a hard place.
His bank wanted back the entire sum owed of Ksh 472,000 but the young farmer could hardly marshal up anything from his coffers. Efforts to raise funds from friends bore no fruits and his aging father could do nothing much about it either. At stake, was the entire family land – their only remaining life-line – which the bank was now seeking to auction.
Stories of people taking desperate decisions due to costly financial mistakes are not uncommon in this part of the world. In fact, every household, village and estate has its fair share of errant residents whose only mistake was to take a loan for the wrong reasons or at the wrong time.
That’s why I found it wise to share 11 things you should NEVER take a loan for. Not because loans are bad, but because these eleven put you at a tight-noose situation and can easily throw your life into complete disarray.
1. Betting, Gambling Or Playing Lotto: I know, we have quite a number of gamblers over here and so I am going to be very careful with my words. But listen to me keenly, never risk an amount of money you cannot afford to lose. No matter how obvious the outcome of the options on the ticket appear to be, a loan (whether from a bank or a friend) should never be your recourse.
2. Paying Rent: As with betting, paying your rent on loan is always a bad idea. Can you imagine spending sleepless nights worrying about how you are going to clear a loan plus interest for a house that will never become yours? It’s unhealthy, unwise and illogical.
3. Unnecessary Medical & Cosmetic Procedures: Mganga toka kitui, Miti shamba libido enhancing products, bleaching, butt augmentation, liposuction, facelifts, botox injections, weight loss programs, fad diets etc are the trend nowadays as people seek for ways to improve their physical and psychological wellbeing. But much as each one of these procedures may have some benefits, you should be very careful not to sink your financial fortunes in them.
4. Christmas & Birthday Presents: Taking a loan to finance your girlfriend’s birthday party or to purchase a fancy present for your friend’s wedding isn’t a smart idea. It’s better to give a small gift with a clean heart rather than an expensive one with unwarranted cost implications.
5. Flossets: Flossets are things that appear like assets but they are not really assets because they lose value over time. These include leather personal cars, sofa sets, expensive jewelry and trendy mobile devices. Avoid buying these on loan. There’s nothing worse than appearing rich when you know very well you are actually broke.
6. Vacation: While vacations (popularly known as #Vacay on social media) provide you with tonnes of photo to post on your Facebook and Instagram accounts, they are not worth taking on loan. Instead of wondering where your next vacation is, may be you should set up a life you don’t need to escape from.
7. Wedding & Dowry Payments: It all starts with the typical statement “We just want to have a simple garden wedding, blah, blah, blah”…before you know it, you are creating Whastapp Group wedding committees to arm-twist your friends and family to contribute to your wedding. Just a few months into your relationship and you are financing loans from here to Tumbuktu. Not worth it!
8. Fundraisings & Extravagant Church Contributions: Before you run to your bank or SACCO to borrow in the name of meeting your Daddy and Mummy pastor’s extravagant demands; think thrice (not twice). Even the Bible tells us in Proverb 22:7 – The rich rule over the poor, and the borrower is the servant of the lender…meaning; the minute you go into debt, you lose a portion of your freedom. The Bible in Malachi recommends you only take a portion of your harvest to the church…not loans.
9. School Fees Don’t tell me school fees is an emergency. By the time your daughter or son studies to the point of sitting KCPE, you know very well what is coming next. As a responsible parent, you are supposed to have saved early enough. If you have to take a loan to pay your kid’s school fees just know that your competence as a parent is questionable. You should have planned earlier!
10. Funding Your Political Ambitions I know of someone who did this in 2007. Long story short, he did not even come close to winning the elections. Lived in depression for 3 years and died a poor young man. No matter how certain your 2017 seems, don’t debt-finance it.
11. Starting A Business I know this is bound to generate controversy because of many reasons. But take it from me, only morons launch their startups on loans. At the startup stage, you are dealing with too much uncertainty and you don’t want to add the worry of repaying a loan to your schedule. Why not raise money from crowdfunding sites, family, savings or grants?
Final Word The list of reasons why young men and women are getting themselves entangle in the debt maze are boundless. Have you ever seen someone who took a loan for a reason you thought was plain stupid? Feel free to share on the comment box below.