Rebuilding Financial Security For Middle Class [A Plan]

Introduction

After reading an article on Business Today about the economic challenges facing India’s middle class, I decided to write this post. The article highlighted how salaries have stagnated at Rs.10.5 lakh per year for the last decade. It also talks about how automation is eroding jobs, and rising debt is becoming a structural problem. These issues are not temporary, they are reshaping the financial security of the middle class in a way that demands action.

In this post, I’ll propose a realistic and implementable plan to address two key structural concerns, flat wages and job losses due to automation.

Let’s examine the situation and outline practical steps you can take starting now.

Understanding the Problem

Suppose a person’s salary has been fixed at Rs.10.5 lakh for the last 10 years.

During this period, assume the average inflation rate for essentials, food, utility bills, entertainment, education fees, medical costs, etc, has been 6.5% per annum. At this rate, after 10 years, the inflation-adjusted value of that Rs.10.5 lakh salary drops to approximately Rs.5.36 lakh. In other words, the purchasing power has halved.

This is not a guess, it’s a fact derived from basic economic principles and aligns with the income tax data cited in the Business Today article.

Meanwhile, automation is steadily eliminating traditional middle-class jobs.

For example, bank tellers have been replaced by ATMs, and now generative AI threatens roles in manufacturing and office settings. With stagnant incomes and fewer job opportunities, many have turned to debt to maintain their lifestyle, creating a cycle that’s hard to break.

These are structural shifts, not short-term setbacks, and they require a proactive response.

So, allow me to discuss a solution that can help to rebuild the financial security of we middle class people.

Solution 1: Increase Income Through Targeted Skill Development

If your salary has remained unchanged for years, waiting for a raise is unlikely to solve the problem.

Employers are not increasing wages significantly because market forces, global competition, automation, and cost-cutting, don’t demand it. To break this stagnation, you must enhance your earning potential through targeted skill development.

Consider your current profession and identify a complementary skill that is in demand.

• For instance, if you are an accountant earning Rs.10.5 lakh annually, learning data analytics could be a logical step. Tools like Python or Power BI are increasingly valued in finance roles. A six-month online course, costing Rs.10,000–Rs.20,000 could equip you to analyze trends or optimize budgets. These new skills that might push your salary to Rs.15 lakh or more.
• Similarly, a marketing professional could learn digital advertising techniques, such as Google Ads management, which small businesses are willing to pay for.

The investment is minimal compared to the potential return.

If you dedicate 5–10 hours per week, within a year, you could position yourself for a higher-paying role or freelance work. Data from job portals shows that professionals with niche skills often earn 30–50% more than their peers.

This approach directly addresses the wage stagnation issue by increasing your market value.

Solution 2: Adapt to Automation by Focusing on Irreplaceable Roles

Automation is a growing threat, but it does not eliminate all jobs equally.

Machines excel at repetitive, rule-based tasks, like data entry, basic coding, or assembly-line work. However, roles requiring human judgment, creativity, or emotional intelligence remain difficult to automate.

To protect your income, shift toward these areas.

• For example, consider education or training. A teacher or corporate trainer relies on interpersonal skills and adaptability. These are qualities AI cannot fully replicate.
• Alternatively, sales positions that involve negotiation and relationship-building are less vulnerable than scripted call-center jobs.
• If retraining feels daunting, adapt your current role. A customer service employee could focus on handling complex complaints, which bots struggle to resolve, making themselves indispensable.

The transition requires effort (there is not doubt about it).

A certification in teaching or a short course in sales techniques might cost Rs.15,000–Rs.30,000 and take 3–6 months.

However, government data and industry reports indicate that human-centric roles are growing in sectors like education (8% annual demand increase) and personalized sales (6–7% growth).

By aligning your career with these trends, you can reduce the risk of job loss and maintain or even grow your income over time.

Solution 3: Reduce Debt Through Strategic Financial Adjustments

Rising debt is a direct consequence of flat wages and rising costs.

To address this, you need a plan to lower your liabilities without drastic lifestyle changes.

• Start by reviewing your existing loans. Consider paying-off your loans one by one (loan prepayment). If you have a habit of making payments using your credit card, and you do not pay the credit-card bill in full each month, stop using the credit card. You can also consider refinancing your costly loans from other banks.
• Next, redirect small amounts of discretionary spending into savings. For instance, reducing dining out or online shopping by Rs.5,000 per month and investing it in a mutual fund SIP could yield significant results. At an average return of 10% per annum, Rs.5,000 monthly grows to Rs.4.1 lakh in 5 years. This amount will be enough to clear a car loan or build an emergency fund. This approach avoids the need for extreme cuts while gradually reducing reliance on debt.

These steps are practical.

Renegotiating a loan takes one phone call. It might looks daunting in the beginning, but give a phone call to your bank. Then you can also call other banks and explain your requirement. You will be surprised, how many banks will entertain your call. You will get a better deal.

SIPs can be started with as little as Rs.500. The key is consistency, small adjustments compound over time, freeing you from the debt cycle.

Conclusion

The middle class faces structural challenges, stuck salaries, automation shrinking job pools, and debt rising as a coping mechanism.

However, these problems are not insurmountable. By developing in-demand skills, shifting to automation-resistant roles, and making strategic financial adjustments, you can rebuild your financial security.

The data backs this up, skill-based income growth and debt reduction are proven strategies worldwide.

Start with one action, enroll in a course, research a human-centric career shift, and call your bank (if you have loans). Make sure to cut your discretionary expenses and use the saving to start a SIP in an equity mutual fund.

Over the next decade, these steps can lift your income beyond your current status.

The situation may be tough, but with a clear plan, you can change the outcome.