Debt is the new normal, but should it be?

In a time where avocado toast and 'some posh coffee place' lattes are the symbols of millennial and Gen Z financial doom, let's take a moment to dissect the elephant in the room, debt.

In 2020, the Bangladesh Bank reported that personal loans, including credit cards, accounted for 14.3% of the total private sector credit. This figure has been steadily increasing, indicating a growing reliance on borrowed money to fund everyday expenses.

The culture of borrowing is not inherently bad; however, when it becomes a means to sustain an unsustainable lifestyle, it leads to financial peril. The rising cost of living, coupled with easy access to credit, has led many young professionals into a spiral of debt.

Debt isn't just a financial burden; it's a psychological one. The stress of mounting bills can lead to anxiety, depression, and a host of other mental health issues.

The more stressed you are, the more likely you are to make poor financial decisions, which only leads to more debt. While scrolling through our Instagram feeds, we often get caught up in the whirlwind of picture-perfect lives, forgetting the reality behind those glamorous posts.

What happens when the facade crumbles and the bills come due? Let's explore the pitfalls of debt and see if we can navigate financial freedom without sacrificing our sanity or social media clout.

Debt is like that clingy ex who won't take the hint. You think you've got it under control, but it keeps popping up at the worst possible moments.

The cycle usually starts with a seemingly harmless purchase—a new gadget, a fancy dinner, a vacation. But it quickly spirals out of control. Credit cards, student loans, car payments - they all add up, creating a mountain of debt that's almost impossible to climb.

FOMO is the driving force behind many poor financial decisions. It's that nagging feeling that you're missing out on life because you're not living like your favourite influencer.

The constant barrage of curated perfection creates an unrealistic standard that few can meet without resorting to debt. Pop culture has played a significant role in normalising debt.

Remember shows like "Keeping Up with the Kardashians"? They used to glamorise extravagant lifestyles, making luxury seem attainable to the average person. But what these shows don't highlight are the financial struggles behind the scenes.

For instance, many celebrities endorse products and lifestyles that they do not fully finance out of pocket; sponsorships and brand deals often cover their expenses.

Then there is the social media influence. That moment when you post a picture of your brand-new iPhone 16 Pro Max, captioned with something like, "Living my best life." The likes and comments pour in.

For a fleeting moment, you feel on top of the world. But behind that picture-perfect shot lies a reality that most won't admit.

One of the most significant problems with debt is the culture of silence surrounding it. No one wants to admit they're struggling, especially in a world where success is measured by the number of followers you have or the luxury brands you wear. But keeping silent only makes things worse. It's time to break the taboo and start having honest conversations about money. Plus, money is already taboo itself. How many of us have heard that we're supposed to receive a bill, but it's being delayed? Why are we obsessed with money?

Now, do we ever get to break free from the shackles of debt? It's not easy, but it's possible. Let me suggest some steps that might make life better than before for many.

Create a budget

Yes, it's super boring, and yes, it's necessary. But a budget helps you see where your money is going and where you can cut back. You do not need a financial model, but some basic calculations and tracking always help.

Live below your means

This one is the most debatable. It doesn't mean you have to live like a monk, but it does mean making wise choices.

Build an emergency fund

Life is unpredictable. An emergency fund acts as a financial cushion, helping you avoid going into debt when unexpected expenses arise.

Please seek professional help

In Bangladesh, it is a bit uncommon, but the culture is rising. If you're drowning in debt, don't be afraid to seek help from a financial advisor. They can provide you with personalised strategies to get back on track.

Educate yourself

The more you know about personal finance, the better equipped you'll be to make smart financial decisions. Navigating financial freedom in the age of Insta-flex and FOMO is no easy feat.

It's a constant battle between wanting to live your best life and ensuring you don't end up broke and broken. But with the right mindset and strategies, you can break free from the debt trap and achieve true financial freedom.

(The writer is an engineer-turned-finance-expert-ESG-enthusiast, trying to drink gulps from the stimulating ocean of economics/ESG and move to greener pastures of the development sector to shift from his regular, tedious job in the capital market. Tell him how he can do that at galibnakibrahman@gmail.com.