A report by Economic times suggested that the socio economic gap is widening with the lower income middle class increasingly shrinking and the super-rich class increasing their wealth. The rich grew their wealth by 86% whereas the middle class shrunk by 25%. This has a boomerang effect on consumption and the rise in inflation has not helped either. Loan interest rates have also not come down quickly either. All these factors have increased the hardships of the middle class whose incomes are increasingly shrinking. The total estimated middle-income households in India is around 1.4 billion people, which accounts for 1/3rd of India’s population. Hence, the middle class is increasingly relying on borrowings to support their lifestyle.
SingleDebt is a debt management and credit counselling agency which has expertise in debt management, easy debt repayment plans, negotiations and restoring financial discipline in your life. If you belong to the middle class and are going excessively into debt, we provide advice on solutions like integrating multiple EMI payments into a single one by which you can manage your debt efficiently.
Despite increases in the nominal income of the middle class, the real incomes have not gone up much. The economic slowdown due to the Covid pandemic and the erratic wage growth have not helped matters much. The high levels of taxation in India have also not helped matters much.
Consequently, it is a struggle to maintain the same living standards if not for the rising option of quick easy loans, credit card debt or BNPL debt. Solutions for the shrinking middle class
When undergoing financial stringency and hardship, it is necessary for the middle class to do the following:
A budget helps you to track income and expenses meticulously and restrain your spending. You must assiduously track your income from all sources, assess your savings and investments before creating an expense budget.
An allocation of your income in the ratio of 50: 30: 20 would work best where you spend 50% of your income on essentials, 30% on wants and paying back debts and 20% directed to long term savings. If possible, reduce your impulse buys in order to direct more funds towards paying off your debts.
It is better to reduce your applications for new borrowings. This becomes easy when you reduce your impulse buying.
You can use methods like debt avalanche method where you pay off the high-cost debts or the debt snowball method where your low interest debt is paid off first. Both methods help to reduce your outstanding borrowings and the accrued interest thereon.
This must contain at least 6 months to 12 months income to cover emergency expense payments. Ensure that you don’t use these funds for other purposes. This enables you to stave off financial crises when there is an unexpected job loss etc.
You must buy term insurance to cover unforeseen emergencies like a death of the primary wage earner in the family. Term insurance premiums are also small but there is a financial payout in case the unexpected happens. This helps the remaining family members to fend off a financial crisis.
Explore opportunities to cultivate alternative sources of income. Apart from your primary job, a secondary means of livelihood which may include a self-owned enterprise can constitute a secondary source of income. Rental income, investments and online businesses can also provide a lucrative source of secondary income.
Diversify your investments among different asset classes to avoid undue fluctuations due to concentration in any one asset class.
Professions like AI and Machine Learning, technology, digital marketing, and financial services offer high income streams. Try to see if you can develop your skills in any of these areas.
Habits like recycling, waste reduction and avoiding overconsumption help to reduce wasteful spending and focus more on essential living costs. This also reduces overconsumption.
You can collectively push for better monetary and fiscal policies. This includes reduction of the tax burden, RBI focusing more on lowering the interest rate trajectory etc., to ease the burden on the middle .SingleDebt is leading the charge in this area with our Debt-Free India Movement. You can access the link and sign the public petition to support the cause.
A robust middle class drives consumer spending, fosters innovation, and supports equitable growth for the nation. Its decline results in income inequality, reduces social mobility, and limits access to essential services like education and healthcare. To tackle this issue, policymakers must prioritize measures that strengthen the middle class, such as increasing access to affordable housing, improving job quality, and expanding opportunities for skills development.
SingleDebt can be a game-changer for the middle class, offering a streamlined approach to debt management. By consolidating multiple creditor EMIs into a single, manageable repayment plan, SingleDebt reduces financial stress and provides clarity, enabling you to regain control of your finances. This structured approach helps tackle high-interest rates, avoid missed payments, and create a sustainable path toward financial .You can also improve your credit scores, if you generate a genuine payment history with regular payments All this aids in creating an improved borrowing experience with lower interest rates and longer credit periods for better debt management strategy.
Take the first step toward a debt-free life contact SingleDebt today to explore how our expert solutions can transform your financial future! Our debt management services also include legal support and creditor harassment relief for mental peace.
add improved credit score by genuine payment cycles leading to a better borrowing experience in the future with favourable interest rates.
SingleDebt specializes in effective debt management solutions, helping individuals and businesses reduce their debt and regain financial stability.
