#642.
Context: Few messages I received from Folks on how even Rs. 2,000,000 (20 Lacs)(25,000$) an Annum is not enough to meet ends meet in Bangalore / Metros for a family.
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Hey folks, let’s talk about something we’re all facing—the crazy speed at which the cost of living in India is shooting up. Globally, we’re nowhere near the top of the cost-of-living index (Basel is 104, New York is 100, while Bangalore, our priciest city, is just 28.3). But don’t let that fool you—the squeeze here is real. Inflation, taxes, and creaky infrastructure are hitting us hard. Roads are a mess, traffic eats up our time, and forget doing productive side hustles in your free hours. The state and central governments? They seem busy with distractions and appeasement, leaving us to fend for ourselves.
Then there’s the air quality—choking us daily—slums, poor hygiene, and unplanned healthcare costs. I’m sick this week, and I’ve already shelled out $100 (unplanned, of course!). Hospitals charge whatever they want, and low-cost care feels risky because the quality’s dicey. So, we end up at expensive tertiary care right away. Add to that—we’re living longer. More years mean more of these surprise expenses. Even with health insurance and pensions, I wonder: will $25,000 a year (in rupees) be enough for a decent life by 2030? Inflation’s eating everything up.
And don’t get me started on the social tension—haves vs. have-nots. How long before you’re robbed on the street? (Fingers crossed gated communities stay safe! at least for now!) So, how do we vaccinate ourselves against this inflation and uncertainty? Here’s what I’ve been doing for years, plus some extra ideas:
- Zero-Based Budgeting
Plan every rupee—monthly and yearly. List all expected and unexpected expenses. Knowing what’s coming helps you stay ready.My tracker. ( I update at 5am with Lalitha).
- Track Every Paisa
Use apps or software to log daily, monthly, and yearly spending. Categorize it—food, bills, healthcare—so you see where the money’s going.
- Sleep on Big Spending
For anything beyond routine expenses, wait 24-48 hours. If it still feels right, go for it. This has saved me tons! (At home, anything above Rs. 3000 spend on a new item, needs an unanimous vote to proceed including Children)! - Clear Debts Fast
Pay off loans ASAP—even if it means skipping holidays, fancy dinners, or gifts. I cleared my home mortgage 3 years early with bonuses (and my kids chipped in too!). Avoid hotel/ ordered food /eat out- as much as you can! If you keep a tab on that account, you will realise, how much money goes. (so are in snacks, packaged /ready to eat etc) - Multiple Income Streams
Don’t rely on one source. Two or three streams—even small ones—are a lifeline. Every rupee counts. - Play It Safe with Investments
Avoid high-risk schemes promising crazy returns—they’re usually too good to be true. Stick 90% in safe bets like gold bonds or low-to-medium-risk funds. High-risk? Only 10% if you’re a gambler (I’m at 0%). - Get a Financial Advisor
A family advisor can give ideas and manage portfolios. Listen to them, but you make the final call. 2024, I was strongly encouraged to go for Medical insurance, and I did. (Much against my will, as I feel all Insurance policies are hoax).
Extra Tips from Me
- Build an Emergency Fund
Save 6-12 months’ worth of expenses. It’s a buffer for shocks like medical bills or job loss. - Cut the Small Leaks
Coffee runs, subscriptions you don’t use—trim these. They add up fast! - Upskill Yourself
Learn a new skill online. It could open doors to better jobs or side gigs. - Barter or Share
Swap services with friends—like carpooling or borrowing tools—instead of buying everything.
The next 4-6 years look tough, no sugarcoating it. Costs will rise, and rosy days aren’t around the corner. But if we plan smart, track our money, and hope for the best while preparing for the worst, we can pull through. Godspeed, everyone—let’s do this together!
What is that you do? Please share?
Karthik
28/3/25 9am.
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