The crisis of inflation is one of the most significant challenges for households in Bangladesh right now. Prices have increased across every category of household goods and services, therefore affecting how people spend, save and survive every day. The impact is particularly severe on middle-class and lower-income families due to the inflationary stage of the economy, but families can use knowledge of these changes and adopt smart strategies to remain financially resilient during these difficult times.
Rising Food Prices Are The Greatest Pressure
For Bangladeshi households, food is the largest line item on household budgets, accounting for a large percentage of household incomes. Rising prices of food staples, including rice, lentils, oil, vegetables, fish, and other essential items, have forced many families to either reduce their portion sizes or switch to less expensive substitutes, or to eliminate protein-based foods from their diets altogether. Although these types of strategies can assist families by improving their budgets on a short-term basis, they can have a major impact on overall health and nutrition over time.
Transportation and Utility Costs Increase Stress on Household Finances
In addition to rising food prices, household expenses in most parts of Bangladesh are continuing to rise as electricity, gas, water, and transport prices continue to rise. Due to the rise in fuel prices, public transportation and commuting to work has also become more costly. The combination of rising costs of utilities and transportation has provided very little opportunity for working families to save money.
Rising Costs of Education and Healthcare
Inflation affects the rising cost of education and healthcare. Families struggle to manage the expenses of school fees, books and coaching classes, as well as medical expenses. Many families are prioritizing necessary medical treatments and basic education while delaying other medical / non-urgent healthcare and extracurricular activities. Inflation is not just affecting our spending patterns, but it is also impacting the long-term development of people.
The Importance of Smart Budgeting to Survive
The inflationary environment is forcing most households in Bangladesh to take a new approach to how they budget. Families are developing good habits of tracking their expenses and setting limits on what they spend, as well as separating their needs from their wants. To maximise their income, many families now make a monthly grocery list, buy in bulk – when possible, and avoid impulse buying.
The Growth of New Sources of Income and Creative Savings
Many families are starting to develop side sources of income through such avenues as freelancing, starting an online business, offering tutoring services or creating home-cooked food businesses. Increased income, even on a small scale, can help make up for the increased cost of living. Another way families are adapting to the increasing cost of living is through the development of informal savings groups and the establishment of emergency savings funds that serve as a source of funds during times of inflation.
Making Today Work for Tomorrow
Although it is clear that inflation is not going away anytime soon, being proactive and developing a plan for the future can lessen the effects of inflation. By improving their spending habits, finding alternative sources of income, and making smart financial decisions, households in Bangladesh will be able to adapt to the challenges associated with inflation.
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