Middle-class dilemma: Is your lifestyle eating up your Rs 20 lakh salary? Expert unpacks urban woes

By Admin

11 Jul, 2025

A Modern Middle-Class Paradox

Earning ₹20 lakh per annum was once seen as a hallmark of success in India. In the eyes of many, it was the benchmark that promised a secure, comfortable, and upwardly mobile lifestyle. But the ground reality for India’s urban middle class tells a different story one of spiraling expenses, invisible deductions, and shrinking savings. The much-hyped salary, especially in metro cities, barely keeps the head above financial waters.

The Illusion of Wealth

“The perception that ₹20 lakh CTC makes you wealthy is largely an illusion,” says CA Nitin Kaushik, a chartered accountant and financial advisor. While the figure might raise eyebrows in small towns or non-metros, the in-hand salary after taxes, PF, and other deductions drops to nearly ₹1.25 lakh per month a sum that disappears quickly in cities like Mumbai, Delhi, Bengaluru, or Hyderabad.

Where Does the Money Go?

Kaushik breaks down the typical monthly expenses of an average urban professional:

Lifestyle Creep: The Silent Threat

One of the biggest financial traps, according to Kaushik, is lifestyle inflation. As income increases, so do aspirations upgrading phones, more vacations, swankier apartments, fine dining, and the latest gadgets. “The challenge is not earning more, but keeping more. Your income means nothing if your lifestyle eats it all,” he warns.

Middle Class ≠ Financial Freedom

Kaushik points out that a ₹20 LPA salary is enough to sustain a modest lifestyle but not to build significant wealth. It doesn’t offer true financial freedom, which requires consistent savings, smart investing, and long-term planning. “Fancy CTC letters look great on paper, but they’re not a measure of financial success,” he says.

Smart Financial Habits: A Necessity, Not a Choice

To escape the trap of paycheck-to-paycheck living, Kaushik suggests:

• Start investing early: Let compounding work in your favor.
  
  

• Avoid unnecessary EMIs: Don’t finance liabilities that depreciate.
  
  

• Build emergency funds: Life throws surprises be ready.
  
  

• Grow your skills: Breaking the ₹20 LPA ceiling needs continuous personal growth.
  
  

Conclusion: Redefining the Middle-Class Dream

In an era of escalating living costs, being middle class in urban India is no longer about comfort it’s about discipline, planning, and constant vigilance over expenses. The dream of financial security isn’t achieved by earning more, but by spending wisely and saving consistently.

So the next time you see a ₹20 LPA job offer, pause and ask: Is it enough to live well and save, or will it just cover the cost of looking successful?