Earning ₹40 lakh, yet feeling broke
My Paisanomics column in the Mumbai Mirror. (No Paywall).
Savings = Income – Expenditure. If this simple identity doesn’t hold in your life, you are bound to end up in trouble.
What's making even those earnings reasonably well, feel poor?
First, the home loan EMI takes away a bulk of their post-tax income.
Second, borrowing doesn’t stop at buying a home. Loans are taken to buy a car, mobile phones and even for foreign holidays. The hedonic treadmill is at work.
Third, the pressure from the social media leads to lifestyle creep.
Fourth, you are not the only one hooked on to social media: so are your parents and even your in-laws, many of whom lead retired lives with a KRA to discuss how well their children are doing.
They too want a better life for you, often beyond what you can afford.
Fifth, the temptation to spend is everywhere. You come home determined to cook, then a “Hungry kya?” ping pops up – and you end up ordering in.
Sixth, those who build their lives around borrowing forget a simple truth: it is future income spent today.
That assumes you’ll keep earning well – but there are no guarantees. As many in and around the IT sector are discovering, income growth can slow.
Do read and share.
mumbaimirror.indiatimes.com/…