Earning ₹1 Lakh But Still Broke? How ‘Lifestyle Inflation’ Drains Your Salary
Ten years ago, ₹1 lakh a month was considered a mark of financial success. It could easily cover expenses, allow for comfortable living, and still leave room for savings. But in today’s big cities, that amount seems to vanish quickly after rent, groceries, and a few leisure activities.
Why High Earners Still Feel the Pinch
The main culprit is lifestyle inflation. As salaries grow, so do expenses. A modest 1BHK and home-cooked meals gradually get replaced by better-located flats, Netflix subscriptions, frequent dining out, and weekend trips. Social media only adds fuel to the fire—constant comparisons make people spend more to “keep up.”
The High Cost of City Living
In metros like Mumbai or Bengaluru, rent alone can eat up 30–50% of income. For example, earning ₹1 lakh in Mumbai might mean:
- Rent for a 1BHK: ₹35,000
- Utilities & internet: ₹3,500
- Groceries & eating out: ₹10,000
- Travel: ₹4,000
- Subscriptions & entertainment: ₹2,000
- Clothing & personal care: ₹3,000
- Miscellaneous: ₹5,000
- EMI or credit card payments: ₹10,000
This leaves around ₹27,500 at month-end—hardly enough to build meaningful savings. In smaller cities like Bhopal, the same comfort can be enjoyed at half the cost, allowing more room for savings.
Inflation’s Silent Impact
A decade ago, ₹1 lakh had the purchasing power of roughly ₹2 lakh today. With rising costs of food, fuel, healthcare, and education, inflation often outpaces annual salary hikes of 6–8%.
The Social Media Effect
Instagram and other platforms constantly showcase holidays, luxury cars, and expensive brunches. This “comparison-driven spending” pushes people to spend beyond their means, often at the cost of savings.
The Mental Pressure of Middle-Class Success
Earning ₹1 lakh disqualifies you from most government benefits, yet without careful money management, it’s not enough to create wealth. Many also live with the fear of job loss or medical emergencies, especially without an emergency fund or insurance.
Smart Money Moves
- Save at least 20–30% of income through SIPs or mutual funds
- Cut down on non-essential expenses like multiple subscriptions or frequent dining out
- Maintain an emergency fund covering 4–6 months of expenses
- Avoid high-interest debt
- Prioritise insurance for financial security
Ultimately, financial success isn’t about how much you earn, but how much you can consistently save and invest while living within your means.
