A study has provided an overview of the income and expenses among lower-middle-class individuals in 2024.
The study by Home Credit India (HCIN) shows that on average, the personal monthly income of lower-middle-class individuals is around Rs 33,000, while monthly expenses stand at Rs 19,000 in 2024. The growth in income over the past year has kept pace with the increase in expenses, as per the study report.
It further shows that the average of personal monthly income in 2024 stands at Rs 35,000 for metros and Rs 32,000 for Tier 1 and 2 cities, showing an increase from Rs 33,000 (metros), Rs 30,000 (Tier 1), and Rs 27,000 (Tier 2) in 2023.
Among metros and Tier 1 cities, Bangalore, Hyderabad, and Pune emerged as pivotal hubs, offering newer and better prospects for consumers seeking advancement. These cities witness rise in income levels, with Bangalore and Hyderabad leading with incomes 15% and 33% higher than the national average, respectively.
Home Credit India (HCIN), a local arm of the leading global consumer finance provider, released the second edition of its in-house annual consumer survey – The Great Indian Wallet Study: Consumer behaviour towards key financial aspects.
The Great Indian Wallet study was conducted across 17 cities including Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Ahmedabad, Pune, Lucknow, Jaipur, Bhopal, Patna, Ranchi, Chandigarh, Dehradun, Ludhiana and Kochi. The sample size was approx. 2,500 in the age group of 18-55 years, with an annual income between Rs 2 lakh to Rs 5 lakh.
Lower-middle-class spending pattern
In terms of wallet share, the study revealed that grocery (26%) and rent (21%) continues to be the primary expenses dominating the wallet share of the average lower-middle-class Indian. This is followed by commute (19%), children’s education (15%), medical expenses (7%), electricity bills (6%), cooking gas (4%), and mobile bills (2%).
As for discretionary spends, distinct spending patterns among different demographics could be seen. Chennai leads in local travel/sightseeing (59%), eating outside (54%) and watching movies outside (55%) when compared to other metros. Lucknow, on the other hand, is the lowest spender on local travel/sightseeing (17%) and eating outside (14%). Chennai also pays the highest rent (29%), while Kolkata and Jaipur pay the lowest (15%). Ahmedabad and Dehradun spend the least on fitness (1%). Bengaluru & Kochi spends the most on children’s education (23%). Dehradun tops in medical expenses (13%) but spends the least on children’s education (10%).
The study also indicates that in the last six months, almost 60% of people had purchased fashion products like apparels and accessories, with Gen Z showing a greater inclination towards purchasing fashion products and electronics.
Household expenses rise
Household Expenses witness a notable uptick, with an average increase of 6%. In households with more than one earning member, the chief wage earner (CWE) contributes ~80% of the total household expenses, while non-CWE contributes 20%. In the study, 42% of the women are CWE in their respective households.
In terms of savings, 60% of consumers prioritise building a cash reserve to address emergency expenses after covering their monthly fixed expenses.
According to the study, men (62%) outpace women (50%) in savings. Similarly, Gen Z (68%) demonstrates a stronger inclination towards savings than Millennials (62%) and Gen X (53%). Regionally, consumers from the East exhibits higher savings rates (63%) compared to those from the West (61%), South (59%), and North (59%). Furthermore, metros led in savings, with 62% of urban consumers prioritising savings over Tier 1 (61%) and Tier 2 (54%) cities.