Salary jumped from Rs 25,000 to Rs 1.2 lakh, but financial stress didn’t. Bengaluru CA explains what went wrong

A salary is often seen as a turning point in a person’s financial life. But earning more does not always mean feeling more secure. A Reddit user’s experience highlights this gap after their income rose from Rs 25,000 in 2021 to Rs 1.2 lakh at age 28. Despite the nearly five-fold increase, the user said financial stress remained. Most of the salary goes towards rent, family support, SIPs and everyday expenses, leaving only Rs 5,000 to Rs 8,000 by month-end.

From Rs 25,000 to Rs 1.2 lakh

The Reddit user explained that their monthly income increased substantially over the past few years, rising from Rs 25,000 in 2021 to Rs 1.2 lakh today. On paper, the jump represents almost a five-fold increase. Yet, according to the user, their financial situation does not feel dramatically different from when they were earning Rs 25,000. The user questioned where the additional income was actually going, saying that financial stress had not disappeared despite the significant rise in salary.

According to the Reddit user, a large portion of the Rs 1.2 lakh monthly income is absorbed by rent, family support, SIPs and everyday expenses. After covering these commitments, the user said only around Rs 5,000 to Rs 8,000 typically remains by the end of the month. Even that amount can quickly disappear when an unexpected expense arises. This left the 28-year-old wondering whether lifestyle inflation had become a problem and how it could be brought under control without making everyday life unnecessarily difficult.

Bengaluru CA explains the lifestyle inflation cycle

Reacting to the Reddit post, a Bengaluru CA pointed out that a Rs 1.2 lakh salary can still feel like a Rs 25,000 salary. The CA highlighted the contrast between the user’s income growth and their financial experience, noting that the person had gone from Rs 25,000 a month in 2021 to Rs 1.2 lakh today. While that is almost a five-fold increase on paper, the feeling of financial pressure has remained.

According to the CA, rent, family support, SIPs and lifestyle expenses can absorb much of the increase in income, leaving just Rs 5,000 to Rs 8,000 by month-end.

Why a salary hike may not create breathing room?

The Bengaluru CA said she had seen similar situations around her, where the definition of “normal spending” gradually rises as income increases. This can mean that expenses that once seemed optional or unaffordable begin to feel like regular parts of everyday life after a salary increase. As spending expectations adjust, the additional income can be absorbed without creating much additional cash flow at the end of the month.

The CA described this as an often-overlooked aspect of salary growth: income can increase five times while financial breathing room barely changes. The CA’s central point was that financial stress is not necessarily caused by insufficient income.

Instead, spending can expand alongside earnings. As the CA put it, sometimes a person’s “lifestyle has quietly learned to earn more too.”