You didn't overspend — things just cost more. That packet of atta, the cab ride, your child's tuition — all rising 5-6% every year, quietly.
At 6% average inflation, something costing ₹100 today costs ₹134 in 5 years. Your ₹50,000 monthly budget needs to become ₹67,000 just to buy the same things.
If your salary grows slower than that, you're technically getting poorer — even with a hike.
What this means for you
- Cash sitting idle in a savings account (3-3.5% interest) is losing value against 6% inflation every year.
- An FD earning 6.5% barely breaks even after inflation — and taxes eat the rest.
- Your future goals (child's education, retirement) need bigger numbers than you think — ₹50 lakh today could mean ₹1.3 crore in 15 years.
What you can do
- Keep only 3-6 months of expenses in savings/FD — the rest should aim to beat inflation through equity SIPs over the long term.
- Revisit your budget every year and bump up your SIP amount by at least 8-10%, matching real-world price rises, not just your salary hike.
Inflation isn't the enemy — standing still while prices move is. Small, yearly adjustments protect you better than panic ever will.
Grow with clarity 🌱