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Financial Literacy for Bangladeshis in the UK: Enhancing Your Economic Well-being

03 May 2024


According to a report by the Bangladesh High Commission in London, over half a million Bangladeshis are working in the UK to earn a living. They tend to regularly send money to Bangladesh from UK to offer financial aid back home.  

Why they work in foreign countries is because they are unable to find reasonable and sustainable jobs in their native country.

But do you know that attaining economic well-being is not dependent on what you earn and where? What is it that helps you achieve financial prosperity, you wonder right?

Well, it is a long journey that starts with financial literacy.  

This blog will walk through financial literacy and how to become financially literate and achieve economic well-being. 

Steps to Become Financially Literate and Achieve Financial Independence and Well-Being?

Financial literacy is about knowing everything concerning your finances. It means that you have a complete idea about how to manage your financial life and make better financial decisions. If you become financially independent, you can enjoy financial well-being even if you are earning a relatively low income.    

It is one of the reasons that many with meager resources seem more financially prosperous than those with bigger incomes. The simple reason is the presence of financial literacy.

Furthermore, financial literacy helps you make the right decision when you plan to send money online to Bangladesh from UK.

Take a look at the simple steps that will help you become financially literate.

Open a Savings Account in a Bank in the UK

The first step is to open a savings account in your host country. It comes naturally because, in developed countries like the UK, you essentially have to open a bank account. Although, the type of bank account you essentially have to open in a foreign country is a checking account, with it opening a savings account becomes easier.

But remember that you should not stop after opening a savings account. Make sure to keep contributing to it every month after receiving your salary and before spending.

Understand How Credit Score Works  

When you are working in the UK as a Bangladeshi migrant, you essentially have to use your credit card to make purchases and payments. Using your credit card usually like others around you is pretty standard, but when you aim to become financially literate, you must know how your credit score works because your creditworthiness depends on it.

Some of the points you must be aware of about your credit card usage and score are:

  • Your payment history   
  • The total amount you owe
  •  The percentage of the available credit being used, which is known as credit utilization
  •  Length of your credit history  
  •  Types of credit you use
  •  Recent credit applications

Also, try to understand what it will be like if you choose your credit card for a money transfer from UK to Bangladesh. It means that you must be aware of the process, the time it will take to deliver funds and most important of all, what will be the costs involved in the entire process.

Learn the Importance of Loans and Repayment

One of the financial dreams you wish to see fulfilled is to get rid of the loans and debts that you have. Right? Therefore, while you are on your journey to become financially literate, you must understand loans and debts and the importance of repaying them.

One of the quick tips to repay your loans and debts is to pay the bigger loans first. It will help you get rid of the interest payment in addition to the principal amount that you have to pay.

Most people tend to pay the smaller loans first, but in doing so, they quickly forget about the snowball effect that deferring the repayment of bigger loans causes later. 

Expect Risks and Emergencies and Prepare for Them

Always be prepared for the financial risks and emergencies. No matter how much you earn and regardless of your savings, always remember that knowing about economic risks and emergencies is an integral part of financial literacy.

Most people do not anticipate financial emergencies and risks, and when these come their way, they are unable to handle them. Its natural outcome is financial loss as you need to gain the required knowledge and end up spending more than the amount that suffices to settle the matter.

Learn to Make a Budget and Live on It

Knowing the best techniques to create an effective budget as an expatriate is central to financial literacy for you as a Bangladeshi migrant.

For further information read: The Best Budgeting Techniques for Expat Workers - Everything to know

A budget enables you to know what your income and expenses are and helps you monitor the flow of your financials. It is through the budget that you can track your money, know where are you spending more than you should, and where slashing your expenses can help you without compromising your overall financial well-being.

It is through budgeting that you can save money. But where you might find making a budget an easy process, make sure to live on it which may force you to go against your financial habits.

Take Every Step to Secure Financial Future

Another step you need to take to become financially literate is to make enough savings to secure your and your family’s financial future. The reason is simple: you travel to another country to earn a living for a specific time which will end one day, and you will return to your home.

At that time, what will you do if you are no longer able to work?

Therefore, make sure to take every step that you can to secure your financial future. It can be largely through savings or investments.

Reduce Your Spending Where Possible

Another integral part of being financially literate is to reduce spending where possible. Thus you can easily do by creating a budget and living on it essentially. But while you are trying to slash your expenses, make sure to deeply analyse your overall expenses and then make the necessary cuts.

Know the Financial Culture of Your Host Country

Another step to becoming financially literate is to understand the financial culture and landscape of your host country. Always remember that the financial habits of the people of different countries differ and vary. Therefore, to become financially literate to achieve economic well-being, deeply understand the financial landscape of your host country.

ACE Money Transfer Helps You Substantially in Achieving Financial Well-Being

When you make offline or online money transfer from UK to Bangladesh to offer financial support back home with ACE Money Transfer, you get several financial benefits.

Since the process is repetitive and incurs costs, it can affect your finances in several ways and elongate your journey to achieving financial well-being. But ACE Money Transfer helps you get live and market-competitive currency exchange rates, and deliver funds swiftly and safely.

Furthermore, the firm also charges you with a low fee on your transactions and that too only if the amount you are transferring reaches a certain threshold below which the chances of sending money without any charges are fairly high.

The best part is you can initiate, track and complete a transaction right from the middle of your comfort zone. 

FAQs

What is financial literacy?

Financial literacy refers to the deep and cognitive understanding of your financials. It means knowing your financial standing and the ways to improve your financial health if there is a need for improvement. Financial literacy can be achieved through certain courses as well as through certain practical financial steps.

Why is financial literacy important?

Financial literacy is critically important because it helps you attain financial independence and economic prosperity both as an individual and as a family. Financial literacy enables you to understand your financial status and make informed and correct financial decisions.

What are the essential components of financial literacy?

Although financial literacy is a broad term and has a vast scope, it has a few essential components on which financial literacy largely stands. These components are budgeting, investing, borrowing, taxation, and personal financial management.

How do I become financially literate?

You can become financially literate by understanding the basics of finance, opening a savings account and creating a budget and living on it. You can also expect and prepare for financial risks and emergencies, understand your credit score, know how to repay debts. You can also have detailed information regarding your host country’s financial landscape, reducing spending, and taking the essential steps to secure your financial future.

How does financial literacy help me attain economic well-being?

Financial literacy can help you attain financial independence because it helps you understand the basics of finance, know your income and expenses and know the concept of value for money. It also includes avoiding impulsive spending, and know where to spend and where not. It also helps you know the ways and techniques to make savings and investments, all of which help you achieve and enjoy economic well-being.

Resource(s)

·      Bangladeshis in the UK

(Bangladesh High Commission, London (bhclondon.org.uk)


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