You receive the job offer letter — ₹1 lakh/month. A round number. A big deal.
For years, this was the figure you wanted to achieve. It meant you had made it into the world of professionals who could enjoy the good life — rent your own flat, have no budget for Friday-night dinners, and even indulge in weekend travel without a second thought. But three months into the job, something does not feel quite right. You are undeniably earning more money than most, but your bank account does not reflect that. Rent takes a massive bite, online food purchases rack up, cab travel become a daily expense, and savings? Forgettable.
This is the new middle-class struggle in the metros of India — especially for Millennials and GenZ. For you, ₹1 lakh a month looks like a godsend. In reality, it’s barely keep up. With inflation out-running increase in pay, urban costs rising exponentially, and society’s pressures forcing us to always want more — the idea of a ₹1 lakh salary has grown dim. You are not poor, but, definitely not rich. You are somewhere in the middle — earning enough to not complain, but not enough to feel any sense of comfort.
So, why does this once-aspired figure resonate less power now? And why is financial success, even for those earning six figures, no closer to reach?
In this article, we will examine the numbers and the psychology, examine the changing landscape of what ₹1 lakh/month means in 2025 India.
#1. Lifestyle Inflation: When Increased Income means Increased Spending
One of the biggest reasons ₹1 lakh does not sound like that much money anymore is lifestyle inflation — the propensity to upgrade your lifestyle with any increase in income.
Previously, you would be ok with a small 1BHK and home-cooked meals. However, once you earn ₹1 lakh, the spending patterns change — suddenly you can live with a better neighbourhood, premium OTT’s, weekend trips, takeout regularly, and the joy of online shopping becomes a habit. You justify to yourself that you deserve it. But the fact is that not only will your expenses start to increase in tandem with your income, you will nearly always be playing catch up; because of continued modifications.
Over time you will stop comparing your lifestyle against your old self, and you will start comparing your lifestyle against others who earn more money or portray more. The continuous footsteps that you take to increase your expectations and expenditures keeps you financially lethargic, despite being better off along the way.
#2. The Cost of Living in Urban Areas: Metros are Financial Pit Holes
The cost of living in our major cities (metros) in India has become stratospheric. For instance, the rent you pay when living in Mumbai or Bengaluru can take up 30-50% of your take-home salary.
Let us get into a rough monthly budget for a person earning ₹1 lakh and living in Mumbai:
- Rent (1BHK moderately located): ₹35,000
- Utilities and Internet: ₹3,500
- Groceries and Eating out: ₹10,000
- Daily use items (fuel, Uber, Metro): ₹4,000
- Subscriptions and Entertainment: ₹2,000
- Clothing, key items, and personal care: ₹3,000
- Miscellaneous (gifts, emergencies, and services): ₹5,000
- EMI or credit card dues: ₹10,000
Even before saving or investing, you are left with ₹27,500. In these metros, ₹1 lakh per month is stability, not comfort and certainly not luxury.
Meanwhile, if you earn ₹50,000 in a Tier-2 city like Bhopal or Kochi for instance you may be saving more as rent may be less and you have less commuting costs and no lifestyle inflation.
#3. Inflation: ₹1,00,000 Today Is Not What It Was 10 Years Ago
Inflation means ₹1,00,000 does not have as much purchasing power as it did 10 years ago.
For example: A ₹1,00,000 income in 2013 was sufficient for rent and living expenses in most cities — allowing for a little investment or travel.
Using an average inflation rate of 6% per year, ₹1,00,000 from 2013 is equivalent to over ₹2,00,000 today to maintain the same lifestyle.
Essentials of living, such as food, fuel, healthcare, and education, are up significantly. Even going out to eat or taking a domestic aviation flight has become much more expensive. Salaries may increase every year between 6% and 8%, but often purchasing power remains static — or equivalent to a decrease.
#4. Social Pressure and the Instagram Lifestyle
Not only is there the possible financial expense of aspirational living, but there is also the invisible cost. The media portrays aspirational living as attainable, and many people portray it online, creating an altered perception of reality that you are constantly bombarded with. It appears that nearly everyone you see is flush with cash. Someone is constantly ordering brunches, taking vacations, buying new cars, and wearing the latest fashion brand. Your life starts to feel… inadequate.
This practice can result in “comparison-driven spending.” Even if you cannot actually afford something — you stretch to get the latest gadget or experience, because it seems to be what everyone else is doing. Your real-life financial situation is adversely affected while you create the appearance of success.
This isn’t merely anecdotal evidence — studies have shown that financial anxiety is prevalent among middle-income urban millennials. They feel this anxiety despite having full-time jobs and regular pay checks because they constantly compare themself to their peers and feel like they are “not doing enough.”
#5. The Mental Load of ‘Almost Comfortable’
At ₹1 lakh/month, you fall into a no man’s land of making too much to qualify for government support or assistance schemes, but also not enough to really create wealth without a dedicated amount of discipline.
There is always the anxiety of not running out of money. What happens if I lose my job? What if a major medical event happens? It takes only one bad set of circumstances — a family issue, a large financial outlay, or a recession — and you can go from that fragile stability to almost broke. And with no significant emergency fund or health insurance, it only adds to the stress in your mind.
You are always planning, budgeting, and second-guessing your money decisions. There is a sense that things are not all the way ‘broke’, but you are vindicating how not enough is to be anywhere near fully secure. Again, that ambiguity sits between and shapes how successful you feel, even if the salary number tells you are doing well.
#6. Real Studies Back Up the Emotion
In an article published in March 2025, the investment adviser shared a story about a couple in Bangalore, who were earning ₹2.4 lakh a month and only saving ₹15,000. This illustrates how, potentially, having a high income is not the same as “financial freedom” in metros. The main reasons include expensive housing, hefty EMIs and the relentless increase in lifestyle, with of every ₹10,000 salary increase resulting in almost ₹7,000 of additional expenditure.
In another case, the adviser also introduced a “40-30-30” rule: 40% where you live is housing, 30% is basic needs, and about 30% is discretionary or savings—whereas, in a tier-2 city, you could typically be more flexible with your ratios.
#7. Reconceptualising Financial Success
Previously, making ₹1 lakh a month meant you were successful financially. Now, that simply is not enough. With the cost of living and inflation rising higher than ever, we realise it is not just about earning an income. We have to properly manage our money to ensure a comfortable lifestyle and financial security.
Financial success in today’s world means having a well thought-out savings and investment program, an emergency fund, insurance protection, and manageable debt. More than anything, it means establishing long-term wealth and ensuring peace of mind. If we want to have success beyond, simply earning income, we must change our opinion of what constitutes success. True success is what you keep, grow, and protect!
Solutions: Letting ₹1 Lakh a Month Work for You
A lack of financial leverage vis-a-vis ₹1 lakh a month can be frustrating and more common than you can imagine but it does not have to last forever. The problem is so much of what you have budgeted to spend has alluded you, that the key to becoming un-stuck is to realise you have to shift from simply spending to managing money strategically.
First things first, before you go spending, you need to be saving, and/or investing. The starting step is to transfer, as a rule of thumb, at least 20–30% of your income right off the bat. Set up an automated SIP, and have 4–6 months of expenses in an emergency fund (complete with short-term insurance). Completing these first steps would allow for peace of mind, which creates a buffer from the unknown for the proper psyche.
Next, it is time to be cognizant of – “lifestyle” inflation. Where does money go? Subscription services, food deliveries, impulse shopping of things that do not bring much value whatever the case may be – cut down your waste. Avoid any unnecessary debt – thinking especially about high interest front loaded EMIs or credit card dues. Then, you can leverage your spare passive income into investments of value such as assets (mutual funds and others included) that appreciate, but not just depreciating items. Consult a financial advisor in case needed.
Most importantly avoid the pressure of social media – staying away from the belief that just because someone looks rich, that this concept of “success” relates to being secure is the goal. In this club economy, it is not how much money you make that determines whether you are in it. The key is how much you keep, grow, and protect.