Financial Illiteracy in Pakistan

What are assets and liabilities? Most Pakistani students cannot answer this question, and that silence represents a quiet national failure. An asset, simply defined, puts money into your pocket, while a liability takes money out. These are not convoluted ideas, yet the average Pakistani student completes their degree between the ages of 22 and 24, secures employment by 25, and still never escapes financial struggle. The problem is not destitution but a complete absence of financial education, otherwise known as financial literacy in Pakistan. Almost every young Pakistani is fast-tracking to wealth, but wealth is not witchcraft; it is a system. And if you never learn how that system works, you remain trapped in a loop that most professionals never break.

Here is how the loop functions. You graduate, get a job, and receive your first paycheck. Then you spend almost everything on liabilities, rent, utility bills, a car, a phone on installments, dining out, and entertainment. Nothing comes back to you. Your salary increases over time, but your expenses rise too. You are running harder every year yet staying in exactly the same financial place. This is not financial independence. This is a treadmill. And most Pakistani professionals never step off it because they were never taught.

The evidence for this crisis is overwhelming. A study by the State Bank of Pakistan found that only 26 percent of Pakistanis are financially literate, meaning nearly three out of four people cannot distinguish between productive and destructive spending. The State Bank of Pakistan has repeatedly warned in its annual reports that financial illiteracy is destroying household savings and........

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