While Rawat didn’t get a raise, she was one of the lucky ones to escape a pay cut. At her family home, she didn’t need to contribute to household expenses and there was hardly any opportunity to eat out or shop amid the pandemic. Therefore, she was able to save up to 90% of her salary.
Circa 2022: Rawat has come back to Mumbai as she is required to report to office. Her initial excitement about returning to the metropolis, however, has fizzled out after she realised how much costlier it has become to live in a city that she left just two years ago.
The shock has come despite house rent, her biggest expenditure, not increasing much from the pre-pandemic era. “App-based cabs have become costlier. In my favourite restaurants, either the rates have gone up or the quantity of food has decreased. My piped gas bill has shot up by nearly 50%,” Rawat said.
Many Gen Zs, born after 1997, started working in 2019. Due to Covid and WFH, most of them shifted to their hometowns, saving on house rent in metros. Moreover, they didn’t have enough options to spend amid Covid. Some of them invested their disposable income in stock markets and mutual funds, others tested the wild world of cryptocurrencies. However, their financial discussions have now moved from prices of Bitcoin and blue-chip stocks to rates of petrol and pasta.
Price rise is known to hit the poor the most. But as retail inflation soars to an 8-year high of 7.79%, urban youngsters are seeing an impact of prices on their monthly budgets for the first time. For those who live rent-free in parents’ homes, rising fuel prices are a bigger concern than edible oil or vegetables.
How is Rawat managing her finances? “I have made some lifestyle adjustments. For instance, I use auto-rickshaws instead of cabs and have reduced weekend outings,” Rawat said. While many youngsters said they have got pay hikes in recent months, the raise isn’t enough to offset the increase in cost of living.
Sneha Kadam (25), who works for a data analysis startup, considered quitting her job after her bosses said they needed her to shift to Gurgaon to work from their office. “They said it is ‘hybrid’, that I need to work for only three days from the office, but it doesn’t make much financial sense if I am renting an apartment,” Kadam said. She agreed to shift only after negotiating her pay package. “However, even that is not enough. For leisure and travel, I may have to dip into my savings,” Kadam said.
Abhishek Gijare (24), a research consultant in Pune, has almost stopped riding his scooter as petrol is nearly 30% costlier than what it was at the beginning of the year.
Shrey Gandhi (23), a conservator at a museum in Mumbai, has seen his monthly petrol bill rise by 25% in the last few months. As he has not cut his other expenses, the additional fuel spend has eaten into his monthly savings.
While ordering in or eating out is common with this age group, some are also involved in the kitchen or household affairs. Raveena Sangle (24), a copywriter in Mumbai, often buys groceries for her family. Recently, while buying milk packets, she realised how its cost has gone up by about 20%. “I have had to reduce eating junk food because I am spending more on vegetables and fruits now,” Raveena said. The cost of medicines, which she buys for her parents, has also gone up, she added.
Abhishek, who pays utility bills at his family home, is now more careful about not wasting cooking gas. The game of balancing expenses and savings is, however, difficult for those living in rental accommodation in metro cities without family support.