In the past, having a stable job, owning your own house, and some savings was all you needed to feel secure. Money did not require your continuous attention and the future looked like it would be a bit predictable. To be “well-established” meant having peace of mind, not necessarily wealth.
That sense of stability today feels far more fragile. As median household incomes rise so does the anxiety of financial uncertainty. Whether it’s a health crisis, a loss of income, or a child’s education plan, any of these events can jeopardise years of hard work and planning.
Why ₹2 crore is quietly replacing ₹1 crore
What was a reasonably comfortable income in India a decade ago has dropped by half due to inflation, increasing medical care prices, and longer retirement periods. The costs to achieve a stable middle class today are roughly double what they were ten years ago. Even a single expensive illness or paying for an education for a child could exhaust a family’s savings, creating the need for a minimum of ₹2 crores for security and comfort.
However, housing and education create even more disparity between how much money is required. An average urban house price ranges from ₹1 to ₹1.5 crore. Education for one child may cost anywhere from ₹30 to ₹50 lakh. Even after conserving on every expense, the amount of money once considered a good sum of money to save, will no longer be enough to give a person the same level of financial comfort as it did before.
The middle class is not seeking luxury, they are trying to create stability. So now the question is: How much will you need to save to be able to really feel financially secure?
#1. The cost of a “normal” life has quietly gone up
What was once considered a reasonably comfortable middle-class lifestyle is now much more costly to maintain financially. Many people who want to buy a good home have to take on very large loans, with the cost of education for kids being an ongoing expense for many years, and even with good insurance, medical expenses can ruin your retirement savings at any time.
Even essential needs are becoming increasingly expensive. To put it in perspective, a one-year MBA program today can cost ₹25–30 lakh, whereas a similar program 20–25 years ago might have cost ₹2–3 lakh—roughly equivalent to a year or two of a parent’s salary at the time. Similarly, a major home renovation that now runs ₹15–20 lakh would have been just ₹2–3 lakh for the previous generation.
#2. Longer lives mean longer financial responsibility
Financial obligations grow as people live longer. Retirement is no longer a short phase of life, but an extended period of responsibility. This means that retirement is now likely to be an extended period of financial responsibility for people. Someone who retires at 58 may need their savings to cover all expenses — medical and otherwise — until at least their 80s or 90s.
The longer a person lives, the longer money will be needed to continue to support them.
#3. Income is less predictable than it used to be
In the past, careers were much more linear. Professionals now face layoffs, job title changes, extended career breaks, and/or an unexpected shift in their industry more frequently than ever before. Therefore, we can no longer rely on a consistent monthly income.
If someone is suddenly laid off or forced into an extended career break, they are likely to rely on savings — not income — to stay financially stable during that period. For example, a freelancer or contract professional might earn ₹1 lakh in one month but only ₹40,000–50,000 the next due to project delays or cancellations. Even salaried professionals may face bonus cuts or delayed increments, making it difficult to plan monthly expenses or long-term goals without a solid financial cushion.
#4. Inflation slowly erodes purchasing power
Although income may increase over time, so too will the cost of living. Inflation slowly erodes purchasing power, meaning that even if you have enough money today, it may not feel sufficient tomorrow. For instance, if today you have a saving account with ₹100,000, you would have the ability to cover your expenses and some additional items, however, in ten years’ time that same amount would barely provide you with half of what you can purchase today and so on.
Therefore, households need to budget for significantly more than they originally planned.
#5. Safety nets are limited, so self-funding is essential
In contrast to other countries, India does not provide an overarching system of social protection that includes universal health insurance, comprehensive unemployment insurance, etc.
Consequently, individuals are generally dependent on their personal resources (i.e., their own money) when they experience a life event such as an unforeseen medical emergency, funding the cost of educating their children, or supporting elderly parents; this is why individual wealth management becomes so much more important.
For example, a hospitalisation for appendicitis might have cost ₹20,000–30,000 two decades ago, which could be covered comfortably from a month or two of a parent’s salary. Today, the same procedure can cost ₹2–3 lakh in a private hospital, requiring a much larger personal savings buffer to avoid debt.
#6. Aspirations have shifted beyond just “comfort”
Beyond mere survival, today’s middle class seeks a better quality of life—one defined by choice, self-fulfilment, and personal dignity. In this regard, people are looking to be able to pursue their careers with confidence, have the ability to take time off when they need it, and to create long-term plans with reduced worry about money.
Many individuals also look at creating an emergency fund to help protect against unexpected situations, as opposed to just focusing on acquiring material goods.
#7. Building a financial cushion has become a priority
Having a financial safety net is no longer a choice; it’s a necessity. In today’s economy, people save and invest for security and peace of mind, having realised that a job alone no longer guarantees the future.
The financial safety net provides the financial resources needed in emergency situations such as medical expenses, career interruptions, rising cost of living expenses or unexpected family responsibilities. The financial safety net also removes the fear associated with each time an unexpected event occurs, which can lead to a financial disaster.
For example, a young professional earning ₹80,000 per month who keeps an emergency fund of ₹5–6 lakh can cover a 6-month career break, unexpected home repair costing ₹2 lakh, and a sudden medical expense of ₹3 lakh without taking loans or liquidating long-term investments.
#8. Responsibilities don’t end when one goal is met
Before, people thought of their financial goals as being in sequence; i.e., buy a house, pay for your children’s education, and finally retire. Today, however, most people have responsibilities that are ongoing simultaneously (for instance housing loans, education costs, caring for elderly parents, and planning for retirement).
For example, a person may be still making loan payments on a home, while they are also saving money for a child’s future and paying for the needs of an ageing parent. The overlap of these responsibilities makes it harder for families to manage their budgets, and they need to focus on developing a stronger and more flexible financial situation, rather than simply achieving each financial goal individually.
#9. Being “well-settled” has a new meaning
Being “well-settled” has taken on a whole new meaning for today’s middle-class individuals. A decade ago, “being well-settled” could be defined as having a stable job, buying a house, and saving enough money. Today, with rising living expenses, increasing life expectancy, and unpredictable income, along with multiple obligations and responsibilities, “being well-settled” has been totally transformed.
For today’s middle-class individual, financial security is defined by resilience; the ability to absorb shock, adjust to changing circumstances, and sustain one’s dignity throughout life’s various phases.
The reason for this transformation is not based upon a desire to accumulate wealth or pursue luxury items. Rather, it is the result of a growing desire for security within an ever-increasingly unstable environment. The modern-day middle-class is looking to achieve more than just demonstrate wealth, they are seeking peace-of-mind, protection of their lifestyle, and the freedom to make life’s choices. At one time what would be thought of as “enough” does not provide that same sense of assurance today.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult a qualified professional before making investment decisions.
