“Pay Raise Blues: Why Your Wallet Still Feels Empty & How to Outsmart Inflation”
Why Does Someone’s Wallet Feel Lighter After a Salary Raise?
When increment day Doesn’t Feel So Great…
It’s salary increment time! While some employees are celebrating big raises, others are left with average bumps in their pay.
Witnessed personally a mixed bag of emotions as my corporate announced salary increments today.
Irrespective of salary increment why do some feel like their wallet’s On Fire? whereas others are very content with what they have got?
Living the Metro Life: Where’s My Money Going?
Imagine you’re part of a happy family of four living in a bustling metro city, earning a cool 1 Lakh rupees per month. Seems nice, right? But somehow, your wallet keeps getting lighter. Let’s see where your hard-earned money is going.
Expenses Breakdown:
- Rent or mortgage: 25,000–35,000 rupees (so long, dream house!)
- Grocery and utility bills: 25,000–30,000 rupees (electricity and water bills, the bane of our existence)
- School fees for two kids: 10,000–15,000 rupees (education ain’t cheap!)
- Taxes: 10,000–20,000 rupees (Tax authorities never compromise on their cut, we all aware of those notices on small anomaly too)
Result: feeling like a broke college student, even while earning 1 Lakh rupees
The Inflation Monster: Prices Rising Faster Than Your Salary
Inflation is a sneaky beast, nibbling away at your paycheck. We often hear about 4–6% inflation rates, but that’s just the tip of the iceberg.
Just take a look at your expenses over the last two years:
- Cereals and edible oils up by 25%
- Gas cylinders from Rs 750 to almost Rs 1,200
- Electricity costs up by 14%, with some states considering a 40% increase
- School and college fees skyrocketing
- Petrol hitting a quarter-century after scoring a century
So, how big should our salary increments be to keep up with inflation?
The Gap Widens: Salary Growth vs Inflation
This growing chasm between salary increments and inflation leaves many middle-class families struggling. But why is this happening?
The Great Inflation Mystery: Why Are Salaries Lagging?
It is a complex subject, and requires a greater level of comprehension, but the important factors are :
- Government policies: Short-term fixes like printing more money, and bailout packages for those failed mammoth big corporates and banks (YES YES it was our money) lead to higher inflation.
- Global economic trends: World events, Un expected pandemics and other countries’ policies impact India’s inflation
- The widening wealth gap: The rich get richer, while the middle class and poor feel the squeeze
Tackling Inflation: Top Tips to Keep You Afloat
- Skill Up: Boost your value with new skills and education, increasing your chances of higher raises.
- Diversify your income: Multiple earners in the family, part-time jobs, or side hustles help supplement your main income.
- Invest wisely: Take calculated risks in investments like stocks, mutual funds, or real estate to beat inflation
- Own inflation-proof assets: Assets with fixed supply or known to hold value during inflation, like gold , land or Bitcoin(just my perspective,your call).
- Optimize your spending: Analyze expenses, find ways to save without sacrificing your lifestyle.
- Prepare for emergencies: Build an emergency fund for financial storms without drastic lifestyle changes.
- Stay informed and adaptable: Keep up with economic trends and adjust your financial strategies accordingly
Conclusion: Fight Back Against Inflation and Take Control
Inflation’s tough to beat, but with the right moves, you can soften its impact. Stay focused on the future and get creative with your financial game plan. Understand the factors behind the salary inflation gap and apply the solutions above to reduce its effects and secure a brighter financial future for yourself and your family.
