The many traps that lay ahead of The Great Indian Nouveau Middle Class
There is a new class of people in India, the nouveau middle class. The PM congratulated them recently. And, they deserve a lot of patting on the back. After all, it’s no mean feat to pull oneself out of poverty and rise to a tipping point where one has to file IT returns. Many such new return filers have grown in the system, and that’s how we know they exist. Kudos!?
The middle class however comes with a lot of traps – both financial, societal and emotional. I know, because I grew up as one, slipped into poverty due to the death of my parents, and had to start my life from scratch. It was easy for me because of education. For others, I am sure it was a million times as tough.?
But I had spent some time on either side, so can give some advice for those newly inducted into the system.?
Rise in obligations: Remember our parents say ‘Log kya kahenge?’ That’s a middle class phase. They have to put up pretences – and necessary for the place and area you stay. For example, a friend of mine in a high-end residence (upper middle class) says that all his five-year-old child’s friends have lavish birthday parties in the lounge area of the building, with a sparkling caterer and spectacular decorations. He too is forced to follow suit because it would look bad and his wife thinks his child would be hurt.?
An average middle class person might be in the dock for similar spending too – at a different scale. Watch it. Please remember new inductees into a class are under more pressure of conformity.?
What people say or think you say is temporary or their feelings are fleeting. The debt in your bank account is permanent and irreversible. If it’s your turn to host a community meeting, make home-made snacks and serve it with confidence, it will rub off on the others. It worked for me. Because I knew that no ‘wagging tongues’ helped me during my days of poverty.?
He calls it Black tax: It might be a controversial word but that’s what the famous South Africa born comedian Trevor Noah says his community had to pay. He and his mother had worked tirelessly to escape generational poverty.?
If you are a nouveau middle class person, like in Noah’s community, almost all your relatives are in poverty or on edge of it. A granduncle needs an eye surgery, a bright nephew needs college fees, an aunt needs ration. It’s a problem even middle class faces, almost all our relatives need handouts. Most of the extra earnings goes into bringing everyone up to the base level.?
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If you are young, just started working and have a decent job, you’d become the default go-to person. It’s inevitable, so store some of your money monthly for it and do not go beyond dipping into funds and research a lot before you give out your hard-earned money. No point being broke as well as broken hearted.?
Rise of the lazy economy: There are a lot more avenues to spend these days, much more than they are to earn. You have a zillion apps to spend money – groceries in ten mins, food delivered in 20 mins, clothes and toys in the blink of an eye.?
They can also clean up your bank account in the blink of an eye. Most financial advisors say that to save money, one should not eat out too often. In this day and age, an app makes everything easy and that’s the biggest trap of all. A single food order is equal to the weekly fruit and vegetable budget of an average family. Remember what you are spending and keep and pin on it.?
Loans unloaded: Another disadvantage of earning a certain amount is that you become eligible for everything – worst of all – loans. They’d call and give you loans for everything from phones to laptops to vehicles and even hair straighteners, I am told. All you have to do is click a link.??
This mixed with the first point of keeping up pretences is a deadly combination of spiralling back into an abyss. Without a keen eye on finances, you’d soon live a poverty ridden life, around middle class furniture.?
Remember, the middle class is certainly a step-up but the nouveau middle class is different from nouveau riche. They’re rich and can afford to put up airs, we can’t. We never could and shouldn’t either. This step doesn’t mean that the life of counting pennies is behind you. It simply means there are more pennies to count.?
Good luck.
Regional Underwriting Head at The New India Assurance Co. Ltd.
4 个月We have families to feed and take care of. We should not be bothered about impressing communities
Editor at The Economic Times for ETBFSI and ETCFO | Finance Journalist | BFSI | Finance | FinTech | Moderator|
6 个月This is meaningful.
Client Solutions Consultant @Eminence Strategy
6 个月So honest and relatable Katya Naidu. More power and strength to you my friend.
Storyteller at Kabuki Creative Studios
6 个月Good read, Katya. These are things that we don't talk about enough and just keep gloating about the macro picture.?
Business journalist I Fintech and financial communication I Research interest in HCI I
6 个月As usual Katya Naidu, a treat to read. I have been lucky, and I also fall a victim to such traps, like spending a bomb on coffee every month, that would feed a family of four. Or even a family of 6. People say and show you calculations that you can make coffee at home and buy a Mercedes, but the same people who never go to Starbucks, do not ever drive anything that can be remotely called a luxury car. If you look at it, all of us spend more than we need. I mean we all could have lived in a smaller house or survived on lesser food and so on, but that is not the idea. According to me, all of us need to live within our means. Also, one needs to save money for future needs. Let us say one wants to save 15 per cent of one's income. Once one does that without fail when the salary or income comes in, one can spend the rest on whatever they want without any feeling of guilt. But I am saying all this as I have been extremely fortunate, which a lot many people in India are not. Then they cannot afford any sort of discretionary spending, let alone spend on luxury.