Author(s): Sinha Marzuka Sultana
Abstract: The aim of this study is to investigate the relationship between financial literacy and money management of young working professionals in Dhaka, Bangladesh. A sample of 103 respondents has been surveyed using a questionnaire based on OECD guidelines for measuring financial literacy. Knowledge about the Big Three financial concepts of compound interest, inflation, and risk diversification, and awareness of the financial products or investment opportunities available in Bangladesh have been used to represent financial literacy. Money management has been analyzed in terms of the management of income, budget, spending, savings, borrowings, and investment. Descriptive statistics, ordinal logistic regression, and Spearmanās rank correlation have been conducted using SPSS Version 23. The results reveal that knowledge about compound interest has a significant positive impact and knowledge about risk diversification has a significant negative impact on income management, and knowledge about available investment opportunities has a significant positive impact on investment management. The level of household income has a positive significant impact on income management and savings management i.e., people with lower levels of household income cannot save enough money.