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Ten years ago, Rs 1 lakh had the value of about Rs 2 lakh today. Rising costs and inflation, often outpacing 6–8% annual salary hikes, have sharply reduced purchasing power
Fear of job loss or medical emergencies looms large, especially without an emergency fund or health insurance. (Representative/Shutterstock)
Earning Rs 1 lakh a month once symbolised financial success, easily covering expenses, savings, and leisure. But in today’s big cities, rising costs mean the amount disappears fast after rent, groceries, and a few outings.
Many high earners still feel financially strained, with lifestyle changes, rising inflation, and social pressures leaving even those earning lakhs through hard work struggling to save.
Strain On The Wallet
The main factor is lifestyle inflation. As salaries rise, so do expenses. What was once a modest 1 BHK and home-cooked meals now gives way to better-located flats, Netflix subscriptions, frequent dining out, and weekend getaways. Many feel they have earned these comforts, but spending often grows faster than income, with social media comparisons further driving the urge to splurge.
Rising Cost Of Living In Big Cities
Another significant factor is the cost of living in big cities. In places like Mumbai or Bengaluru, rent can consume 30 to 50 percent of one’s salary. For instance, if one earns Rs 1 lakh in Mumbai, a normal 1 BHK flat might cost Rs 35,000, with additional expenses like electricity and internet (Rs 3,500), groceries and dining out (Rs 10,000), daily travel (Rs 4,000), subscriptions and entertainment (Rs 2,000), clothing and personal care (Rs 3,000), and other expenses (Rs 5,000). Any EMI or credit card bills would add another Rs 10,000.
Hard To Save Or Invest
At the end of the month, just Rs 27,500 remains, making saving or investing difficult. In contrast, in smaller cities like Bhopal, lower rent and lifestyle costs allow more savings even with a Rs 50,000 salary.
Impact Of Inflation
A decade ago, a Rs 1 lakh salary had the same value as about Rs 2 lakh today. Rising costs of food, fuel, healthcare, and education have eroded purchasing power, with inflation often outpacing the 6–8% yearly salary hikes.
Spending Fueled By Comparisons
Social media plays a significant role in spending. Platforms like Instagram showcase luxurious lifestyles, including brunches, holidays, and new cars, making individuals feel their lives are inferior. This leads to “comparison-driven spending,” where people increase their expenses to match perceived standards.
Mental Pressure
Mental pressure is another factor. Earning Rs 1 lakh a month disqualifies individuals from government schemes, yet it isn’t enough to build wealth without financial discipline. Fear of job loss or medical emergencies looms large, especially without an emergency fund or health insurance.
Smart Ways To Save Money
Saving money starts with setting aside 20–30% of the monthly salary for investments in SIPs or mutual funds. Unnecessary expenses like frequent dining out or multiple subscriptions should be reduced. An emergency fund covering 4–6 months of expenses can provide security, while avoiding debt, especially high-interest loans, helps maintain stability. Financial success depends on consistent savings, wise investments, and effective expense management.
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