PANAJI
A decent monthly salary once gave young workers a sense of financial comfort. Today, many people in their 20s and 30s earning Rs 50,000, Rs 70,000 or even more often wonder why money disappears so quickly. They have jobs, regular income and a modern lifestyle, yet savings remain low and month-end stress remains high.
The reason is often hidden in plain sight — EMIs.
SMALL PAYMENTS, BIG BURDEN
Easy monthly instalments have changed the way many Indians spend. Phones, laptops, bikes, furniture, holidays and even shopping bills can now be converted into monthly payments within minutes. What feels affordable in the moment can slowly become a burden over time.
A young earner may believe they are doing well because they can buy expensive products without paying the full amount upfront. A premium smartphone for Rs 2,500 a month feels manageable. A bike EMI looks reasonable. Add a credit card bill, streaming subscriptions, rent, eating out and weekend spending, and suddenly most of the salary is already committed before the month begins.
LOOKING RICH, FEELING BROKE
This creates the illusion of wealth. A person may look financially comfortable from the outside, but internally may have little cash left after fixed payments. The lifestyle appears strong, but the balance sheet is weak.
The danger is not always one EMI. It is multiple small obligations that quietly pile up. Rs 2,000 here and Rs 3,500 there may not seem serious individually. Together, they can consume a large share of take-home pay. Many young earners underestimate this because each purchase was made separately.
SOCIAL MEDIA AND INSTANT SPENDING
Social media has made this worse. Constant exposure to travel videos, gadgets, fashion and luxury experiences creates pressure to keep up. Easy credit helps turn desire into instant spending. But buying quickly often means paying slowly.
Another problem is that future income gets spent in advance. Every EMI reduces flexibility in the coming months. If rent rises, medical costs appear or a family emergency happens, there is little room left in the budget. Even a temporary job loss can turn manageable payments into a crisis.
GOOD INCOME, WEAK FINANCES
Many people with good salaries are therefore asset-light but liability-heavy. They earn regularly, but own little and owe a lot.
This does not mean all EMIs are bad. A home loan or education loan can support long-term goals. Even a vehicle loan may be necessary for work. The real issue is using EMIs for fast-depreciating wants such as gadgets, impulse purchases or lifestyle upgrades that lose value quickly.
HOW TO ESCAPE THE TRAP
Young earners can avoid the trap with a few simple rules.
First, keep total EMIs within a safe share of monthly income. If too much salary goes towards repayments, financial pressure rises quickly.
Second, avoid taking loans for products that can be bought later with savings. Delaying a purchase often reveals whether it was truly needed.
Third, build an emergency fund before chasing lifestyle upgrades. Even a few months of expenses saved can provide major peace of mind.
Fourth, use salary hikes and bonuses wisely. Instead of immediately increasing spending, close expensive debt or increase savings.
Fifth, track all automatic deductions. Many people know their salary figure but not how much is already committed every month.
REAL WEALTH MEANS FREEDOM
The biggest wealth-building tool is not a high salary alone. It is the ability to keep part of that salary unspent and growing.
Young India is earning more than before, but also borrowing more easily than before. That combination can create progress or pressure. The difference lies in whether income buys assets or only monthly payments.
Feeling rich and being financially secure are not the same thing. The sooner young earners understand that, the stronger their future finances will be.
[The writer has a keen interest in business and the dynamics of stock markets]
