With household savings in India hitting record lows and debt on the rise, personal finance experts are urging earners—especially young professionals—to rethink how they manage money. Priti Rathi Gupta, Founder of LXME, and Mrin Agarwal, Founder of Finsafe India, shared their insights on tackling the “earn-and-burn” syndrome and building a savings-first mindset.According to Gupta, many people only realise they’re caught in a spending spiral after a few years of earning. “The first few years are often driven by impulse—you’re earning, you’re spending, and the world around you encourages it,” she said. Social media and easy access to credit are fueling impulsive purchases, and by the time people reach their late 20s or early 30s, the financial stress begins to set in.The solution, she says, is to start planning from day one. “The day you start earning is the day you start your financial journey,” Gupta noted. “You need to map out your goals, whether it’s further education, starting a business, or buying a home. That becomes your money map—and it guides your budgeting.”
Gupta recommends putting away at least 20% of income toward savings and investments before spending anything else. Automating this process—like setting up a standing instruction to invest—ensures you stick to the plan. She also highlighted the importance of emergency funds, insurance, and making full use of available tax breaks.Mrin Agarwal echoed this sentiment, adding that the current financial landscape reflects a widespread lack of savings. “Household savings as a share of GDP are at a low point, while household debt is climbing. Many people are saving less than 10% of their income and relying on early wage access or loans to get by,” she said.To build financial resilience, Agarwal advocates the 30-30-40 rule:
30% of income for living expenses,
30% for EMIs or loan repayments,
and 40% toward savings and investments.
“Even if you can’t start with 40%, begin with 20–25% and work your way up,” she advised. “Treat savings like your fitness regime. You may love indulgences, but discipline pays off in the long run.”Both experts agree that financial awareness needs to start early, ideally at home or in schools, and that lifestyle pressures shouldn’t crowd out long-term planning. With a little structure, like goal-setting, budgeting, and automation, anyone can flip the script—from spend-first to save-first—and create a more secure financial future.Below is the excerpt of the discussion.Q: I want to get your opening thoughts on whether you think this is a problem that affects only a few—maybe the young—or is this something that you come across often when you speak to your clients and networks? Priti, let’s open with you.Gupta: First of all, I love the topic—the earn-and-burn syndrome—because that’s what we see all around. I think the realisation that I’m earning and burning happens after a few years of earning money.The first few years are usually spent saying, “I’ve got money in my hands. How do I make the best of it?” The world doesn’t make it easier, because every morning you open Instagram, it’s pushing something at you. And you’re impulsive in that moment. It’s only when you get into your late 20s or early 30s that you realise, “Oh, now this is catching up. I can no longer keep pace with my spending.”
So, I think this topic needs to be something we teach in schools or have household conversations around. Because the day you start earning is the day you start your journey towards what I call your financial map. That’s the starting point where you say, “these are my financial goals, and therefore, this is my money map.” It’s only when you know the destination that you know how to get there. If you have no destination in mind, then obviously, you’re just saying, “Okay, I have money, let’s spend it.”Q: But Mrin, you’re based in Bangalore. Is this something you hear around you? Or is this a more Mumbai-specific thing, with higher rents and living costs?Agarwal: I think it’s playing out in the numbers we’re seeing on household savings. Household savings as a percentage of GDP is at its lowest, while liabilities—household debt—are going up and up. So yes, it’s very common for people to be saving less than 10% of their income. In fact, I see a lot of early wage access companies coming up, with considerable demand from people to take loans against their wages. So, this is the situation: there is very little focus on savings at this point in time.Q: Priti, is this just about overspending, or is it more of a behavioural issue?Gupta: Like I said, once we start earning, there’s a lot of pressure—whether it’s the financial world selling us credit cards or “Buy Now, Pay Later” schemes, or just the easy access to money, it makes people feel like, “this is the right time to buy this, or spend on that.” Your lifestyle often takes over your more pragmatic goals.The best way to handle this is to really sit down—it takes just about half an hour—to figure out your financial goals. You might want to study further or start your own business, whatever your aspirations, start by creating an emergency fund. Build your safety nets, because those are crucial.One of the biggest things people don’t do, which can dent your finances, is not having the right insurance. Also, use tax breaks efficiently. If you’re renting in a high-cost city like Mumbai, find out how your rent payments could help save tax. And most importantly, start working on your retirement early.I often tell young women: if you save ₹5,000 every month for 40 years, you’ll have ₹7–8 crore by retirement. Sometimes just seeing that big number helps you work toward it. So, financial goals, money mapping, and effective budgeting are key. Once you know your destination, it’ll encourage you to budget properly.There’s a golden rule: put aside at least 20% of your earnings right from the start—and do it before you spend. What most of us do is spend first, then think, “whatever’s left, I’ll save.” That rarely happens. So, I recommend automating your savings. Instruct your bank to move 20% of your income into investments every month. That way, you can spend the rest with less guilt because you’ve already saved.Q: What you mentioned, Priti, is very interesting—at least 20% of your income must go towards savings and investment. Mrin, what’s your formula?Agarwal: The first thing to remember is that savings are the foundation of your financial life. Without a good amount of savings, you can’t expect to have financial freedom. So, first comes the realisation that savings are not old-fashioned—they are essential.I’ve always propagated the 30-30-40 rule: 30% of your take-home should go toward expenses, 30% toward EMIs (loan repayments), and try to save 40%. I know saving 40% is a big ask, especially with high rents and other costs, but start with 20–25% and aim to gradually increase it.I believe it’s important to think long-term and big-picture. Financial freedom starts with consistent savings. Within your expenses, also split essentials and non-essentials. Non-essentials—could be around 10% of your take-home. It depends on your lifestyle.Think of it like physical health. You may love junk food, but you know you have to eat right to stay fit. It’s the same with money—set limits. Maybe 10% for fun expenses, 20% for essentials, 30% for EMIs, and try to push the rest toward savings and investments.
