Why Many Bangladeshis Struggle with Basic Money Management
Bangladesh’s Financial Blind Spot in a Changing Economy
Bangladesh’s economic story over the past two decades is one of undeniable progress. From the garment boom fueling exports to the rise of digital platforms and remittance-driven rural growth, the country has seen its middle class swell and urban centers flourish. With more families upgrading from bicycles to motorbikes, from tin-roof houses to concrete buildings, and from saving in jars to swiping cards at superstores, the signs of financial evolution are everywhere.
Yet beneath this promising surface lies a quieter crisis—one that’s not about earning money but about managing it. Paradoxically, even as incomes rise and access to financial tools expands, many Bangladeshis still lack the basic skills to budget, save, invest, or plan for emergencies. Living paycheck to paycheck remains the norm, debt cycles are rampant, and long-term financial security is often more a matter of hope than strategy.
Why does this gap persist? Why are so many individuals—regardless of their income level—struggling to gain control over their personal finances? This article dives deep into the cultural habits, educational shortcomings, systemic barriers, and behavioral patterns that keep millions of Bangladeshis financially unprepared, even in an era of economic growth.
1. Financial Literacy is Alarmingly Low
Despite the country’s economic momentum, Bangladesh continues to grapple with a critical issue—an alarmingly low level of financial literacy. As of December 2023, only about 28% of Bangladeshi adults are considered financially literate, according to data from the Financial Inclusion Insights (FII) Program by InterMedia. This marks a slight improvement from the 2014 S&P Global FinLit Survey, which recorded the rate at just 19%, but the figure still places Bangladesh among the lowest in South Asia. This means a majority of people struggle to grasp essential concepts like budgeting, compound interest, inflation, or even the basic difference between saving and investing.
In practical terms, this lack of knowledge manifests in everyday decisions. Many individuals don’t track their expenses or set monthly budgets, often spending more than they earn without realizing the long-term consequences. The concept of “saving for emergencies” is still foreign to many households, especially in lower-income brackets where short-term needs overshadow future planning.
Even among the urban middle class, financial tools are misunderstood. Credit cards are seen as an easy way to access “extra” money rather than short-term loans that must be carefully managed. Microloans are frequently taken without clear repayment strategies, leading to debt traps. The growing popularity of EMI (Equated Monthly Installment) schemes for electronics, furniture, and even luxury items has further encouraged impulsive consumption, often at the cost of financial stability.
The core issue isn’t access to financial services—it’s understanding how to use them wisely. Without that, even the best economic opportunities can quickly turn into financial burdens.
2. Money Talk is a Cultural Taboo
In many Bangladeshi households, money is a subject best left unspoken. Conversations about income, debt, or financial struggles are often considered inappropriate, even within the family. Children grow up seeing their parents make financial decisions behind closed doors, without explanations or open discussions. Asking how much someone earns, how they manage their expenses, or whether they’re in debt is often met with discomfort or outright silence.
This cultural tendency to avoid money talk creates a serious gap in learning. Unlike in some Western cultures where children are gradually introduced to budgeting, saving, and financial responsibility, many Bangladeshi youths enter adulthood without any real understanding of how to manage money. Parents rarely explain the importance of saving or involve their children in planning household expenses, so when these young adults start earning, they are left to figure it out on their own—often through trial and error.
As a result, even highly educated individuals can struggle with basic financial tasks like creating a monthly budget, setting aside emergency funds, or avoiding unnecessary debt. They may fall into poor spending habits or financial traps simply because they were never taught otherwise. The lack of open, honest conversations about money means financial literacy has to be learned late—and sometimes at a high cost.
3. Education System Fails to Teach Personal Finance
Bangladesh’s education system places heavy emphasis on academic achievement, exam scores, and theoretical knowledge—but offers little in terms of real-life financial skills. From primary school to university, students are rarely taught how to budget their money, manage bank accounts, understand taxes, or make smart financial decisions. Lessons on financial planning, savings strategies, or entrepreneurship are either missing entirely or buried under optional content that most students never encounter.
This absence in the curriculum leaves a major gap. As young people graduate and begin earning, they often lack the tools to navigate even the basics of personal finance. Many don’t know how to track expenses, avoid high-interest loans, or prepare for financial emergencies. Instead, they focus on getting degrees, landing jobs, and increasing income—assuming that earning more will solve all financial problems.
But without the knowledge to manage that income wisely, they remain vulnerable to overspending, debt, and long-term insecurity. Financial independence, unlike academic success, doesn’t come with a certificate. It requires life skills that Bangladesh’s current education system still fails to provide.
4. High Consumerism, Low Saving Instinct
In recent years, a wave of consumer culture has swept across Bangladesh, especially in urban areas. Social media influencers flaunting lifestyles, aggressive advertising, and easy access to credit have all contributed to a mindset that encourages spending rather than saving. People are increasingly drawn to the idea of living “stylishly,” even if it means spending beyond their means.
This is especially visible in social customs like weddings, where families often feel compelled to take out loans or exhaust their savings to host lavish events. Similarly, there’s social pressure to buy expensive gifts, branded clothing, the latest gadgets, or dine at trendy restaurants—not necessarily because one can afford it, but because “dekhate bhalo lagbe” (it should look good).
Three patterns stand out:
- Status-driven spending: Financial decisions are often made based on how they will appear to others, rather than long-term necessity.
- Impulse buying culture: Discounts, offers, and influencer promotions on Facebook and Instagram push people to make unplanned purchases.
- Neglect of savings: With most income going toward lifestyle spending, saving becomes an afterthought—if it happens at all.
This desire to keep up appearances often overshadows the importance of building financial security. Over time, it leads to a cycle where people earn more, spend more, and still find themselves financially vulnerable.
5. Living Paycheck to Paycheck
For a large portion of the Bangladeshi population, particularly in middle- and low-income households, survival takes precedence over saving. The constant struggle to meet daily needs means that setting aside money for the future is often seen as a luxury, not a priority.
The high cost of living, especially in urban centers, leaves little room for financial flexibility. From rent and utility bills to groceries, transportation, and medical expenses, the monthly costs quickly add up, leaving families with just enough to get by until the next paycheck. In many cases, there is no surplus at the end of the month—what is earned is entirely consumed by immediate needs.
Additionally, the responsibility of supporting extended family members, including parents or siblings, further strains finances. In Bangladeshi culture, family support is often expected, which means that even if an individual earns a decent income, they may be obligated to share it with relatives, making it even harder to save.
Inflation, especially the rising costs of food and fuel, exacerbates this situation. As prices increase, the purchasing power of a household decreases, meaning even more money has to go toward basic needs, with nothing left to save or invest.
For those working in the gig economy or as freelancers, income is often unpredictable. Small traders, rickshaw pullers, day laborers, and others in informal sectors face instability, as they do not have a fixed salary or benefits like health insurance or paid leave. This income volatility makes it nearly impossible to manage savings, as one bad month can set them back financially.
The combination of these factors creates a precarious financial situation for many, where the next paycheck is not just a source of comfort, but a necessary lifeline to make it through another month. In this environment, financial planning for the future simply becomes out of reach.
6. Reliance on Informal Borrowing and Microcredit
In Bangladesh, many individuals rely on informal borrowing when faced with financial needs, especially in rural areas. Turning to relatives or loan sharks becomes a quick, albeit risky, solution. While borrowing from family and friends may seem like a safer option, it often leads to strained relationships, as repayment becomes uncertain. Loan sharks, on the other hand, offer money quickly but at extremely high interest rates, trapping borrowers in a cycle of debt.
Microfinance institutions (MFIs) have provided an alternative, offering small loans to low-income individuals. However, these loans often come with high interest rates, and borrowers frequently struggle to repay on time. With little understanding of how to manage the repayments, many find themselves stuck in debt traps, unable to break free from the cycle of borrowing and paying back.
Additionally, many rural areas still lack access to affordable formal banking services, leaving people with limited choices. Without access to cheaper loans from banks or other formal credit services, informal borrowing becomes the go-to solution, leading to long-term financial instability for many households.
7. Digital Finance Boom Without Guidance
With the rapid expansion of mobile banking and digital wallets, Bangladesh has witnessed a digital finance revolution. Mobile apps like bKash, Rocket, and Nagad are transforming the way people send money, pay bills, and manage transactions. However, as digital finance grows, so does the risk of misuse due to the lack of financial literacy in this space.
Many users, especially older generations and those new to digital tools, fall prey to scams or poorly understand how to navigate mobile banking apps. Fraudulent schemes often trick individuals into sharing sensitive information, leading to financial losses. Additionally, the temptation of easy credit from digital loan apps has led to impulsive spending. These apps make borrowing feel effortless, with users often unaware of the high-interest rates and the long-term financial burden they can create.
The gap between the availability of digital financial tools and the knowledge needed to use them responsibly poses a significant challenge. Without proper guidance, many are unable to maximize the benefits of digital finance, leaving them vulnerable to debt traps and financial insecurity.
8. Gender Inequality in Financial Access
Gender inequality remains a key barrier to financial independence for many Bangladeshi women. While women in urban areas may have access to bank accounts or digital financial services, a large number of rural women still lack basic access to financial institutions or education. In many households, cultural norms dictate that men handle financial matters, leaving women with limited autonomy over their own finances.
As a result, women often rely on their husbands or male relatives for financial decisions, reducing their exposure to money management skills and opportunities to build wealth. This dependence creates a cycle where women’s financial awareness and confidence remain low, making them more vulnerable to financial exploitation and limiting their ability to save or invest. Without the tools to manage their own finances, women’s economic empowerment is hindered, perpetuating a cycle of financial dependence.
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9. Urban vs Rural Divide
The divide between urban and rural areas in terms of financial access is stark. In urban centers, youth are more likely to encounter banking services, investment opportunities, and financial content through various media. They are also more exposed to fintech services, which make managing money easier and more accessible.
In contrast, rural communities face significant challenges. Limited access to formal banking services, a lack of financial education, and lower technology adoption mean that rural populations often lack the skills and knowledge to effectively manage money. Furthermore, misinformation about financial products and services spreads more easily in these areas, exacerbating the problem. With lower literacy rates and less exposure to reliable financial advice, rural communities are left at a disadvantage when it comes to money management.
10. Weak Governmental and Institutional Support
Despite the growing need for financial literacy, Bangladesh’s government and institutions have been slow to provide the necessary support. There are very few nationwide public awareness campaigns focused on financial education. The programs that do exist are often not widespread or accessible to the general public.
Banks and non-governmental organizations (NGOs) have made efforts, but their initiatives tend to be fragmented, with limited reach outside major cities. Financial education programs are often available only to a small, urban population, leaving vast swaths of the population underserved. Moreover, government schemes designed to promote financial inclusion often lack effective execution and reach, failing to address the real needs of the population. Without comprehensive support from institutions and the government, the financial literacy gap in Bangladesh continues to widen.
Solutions: How Bangladesh Can Overcome This Crisis
To address the financial literacy crisis in Bangladesh, several key measures must be implemented:
- Introduce financial literacy in school curriculums: Teaching personal finance at an early age is essential for building a financially savvy generation.
- Launch nationwide campaigns: Public awareness campaigns on TV, radio, and social media can reach a broad audience and help spread essential financial knowledge.
- Empower women with digital and financial tools: Providing women with access to financial education and digital banking services will help close the gender gap in financial literacy.
- Incentivize banks and fintech companies to teach money management: Banks and fintech companies should be encouraged to offer financial education programs and tools that are accessible to all.
- Promote community-based learning: Local leaders, such as imams or community figures, can play a crucial role in spreading financial knowledge and encouraging responsible money management.
Managing money isn’t just about having a steady income—it’s about knowledge, culture, and mindset. For Bangladesh to build a financially secure future, it must prioritize financial education at every level of society. From the classroom to the workplace, financial literacy should be a fundamental skill, empowering individuals to make informed decisions. A financially literate population is not only vital for individual well-being but is also a key driver of long-term national growth.
