To live without debt sounds like the ultimate financial freedom—no monthly payments, no interest piling up, no creditors calling. In a perfect world, we’d all want that. But we don’t live in an ideal world.
In today’s economy, where inflation is sprinting ahead of our incomes, the question isn’t just “Is it possible to live debt-free?” but also “Is it the right strategy for me?”
To answer this, we need to weigh the pros and cons. Because, like everything in life, there’s more than one way to win this game.
The Benefits of Living Debt-Free in Nigeria
There’s a certain peace that comes with knowing that all the money you earn belongs to you—and only you.
- Less Stress: You sleep better when you don’t owe anyone.
- No Interest Payments: With inflation climbing, avoiding debt means you don’t get trapped paying more than you borrowed.
- Freedom to Save and Invest at Your Own Pace: Every naira saved is yours to grow, without worrying about loan repayments eating into your profits.
Debt-free living can feel like you’ve won the game before it’s even started. But, just like refusing to play any game at all, it might mean missing out on some big moves.
The Limitations of a Debt-Free Life: Opportunities You Could Miss
In Nigeria, there are moments when not having debt could hold you back.
Imagine these scenarios:
- Starting a Business: Without a loan or credit facility, many entrepreneurs struggle to launch their ideas.
- Real Estate Investments: While waiting to save enough to buy land outright, the property you’ve had your eye on might double in value.
- Education and Skills Training: Some of the best opportunities come with a price tag—waiting to save might mean missing that opportunity altogether.
In a developing economy like ours, there are times when debt isn’t a burden—it’s a bridge. Knowing how to cross that bridge carefully can be the difference between being stuck and moving forward.
The Art of Balancing Debt and Freedom
The real challenge isn’t about whether you should live with or without debt. It’s about finding the balance. Debt isn’t good or bad—it’s a tool, and like any tool, it works best when used wisely.
You could borrow to buy land in Ibadan today, with the intention of selling it five years later for a profit. But taking out a payday loan just to buy the latest iPhone? That’s how debt becomes a shackle.
The key to balance lies in two questions:
- Does this debt align with my long-term goals?
- Do I have a clear repayment plan?
When debt is aligned with wealth-building goals and used strategically, it can be empowering rather than burdensome.
Two Nigerians, Two Paths
Let’s explore two personal stories—one debt-free, the other strategically using debt—to see how these choices play out.
Chioma: The Debt-Free Advocate
Chioma runs a tailoring business in Lagos and has built everything from scratch without borrowing a kobo. It wasn’t easy—she had to reinvest her profits slowly and avoid any luxury expenses. But for her, being debt-free means peace of mind. She knows her income is stable, and she won’t wake up one day to discover she owes more than she owns.
Her advice? “It takes longer, but it’s worth it. I never have to worry about someone coming to take what I’ve built.”
Tunde: The Strategic Borrower
Tunde, on the other hand, isn’t afraid to borrow when the numbers make sense. He recently took a mortgage to buy a small apartment in Lekki. Though the interest is steep, he’s renting it out for short-term stays and using the income to pay off the loan. Tunde believes debt is just another tool, saying: “I could’ve waited to save the entire amount, but by then, the apartment would’ve cost twice as much. Debt let me lock in the opportunity.”
How to Know If a Debt-Free Life is for You
A debt-free life sounds great in theory, but in practice, it’s a personal decision. To determine if it’s the right strategy, ask yourself:
- What are my financial goals? If your goal is to build wealth quickly, a well-planned loan might help you get there faster.
- Can I handle the psychological stress of debt? Some people lose sleep over loans—even manageable ones. If you’re one of them, debt-free might be your peace of mind.
- Am I missing out on opportunities? If staying debt-free is slowing down your goals, consider strategic borrowing with a clear repayment plan.
Takeaway: Finding Your Own Financial Path
In Nigeria, there’s no one-size-fits-all when it comes to debt. Some will thrive without borrowing, building slowly but steadily. Others will use debt as a tool, carefully navigating the risks for greater rewards. The right choice isn’t about what works best for others—it’s about what works best for you.
The truth is there’s freedom in both paths. Whether you choose to live debt-free or use debt to your advantage, what matters is clarity, discipline, and alignment with your goals. In a country where uncertainty is the only constant, knowing yourself is your greatest asset.
