10 Reasons for the financial failure

Financial failure of an Indian Family in last 10 years blog

10 major reasons for the financial failure of an Indian family in last 10 years

The financial situation of mid-class Indian families is getting failure day by day in Indian. It is not because of the inflection or the Job loss in the country. It is mainly because of the lack of financial planning, lack of proper financial investments, and mainly due to uncontrolled expenses.

For managing the hard-earned money effectively we recommend you to check the following articles in MyMoneyBooks.

In this article, I would like to show you the fact that, in an average Indian family is ending up spending extra about 2 to 3 Lakhs in a year, which can be avoided. After reading this article you can check your expenses and you can identify the way to save at least 2 to 3 lakhs in a year.

Following are the 10 prime reasons that impact the financial failure of an Indian family in the last 10 years and ended up spending more than what is actually necessary.

1. Vacations based on Social Pressure:

Most families spend the money on vacations only due to social pressure. Most of the middle-class families go on vacation mainly due to social status and they are forced to spend the extra money which they really don’t have.

  • Due to vacation based on social pressure, each Indian average mid-class family ends up spending an extra about 10K on a yearly average.

2.  Smartphone and other Electronic gadgets:

Now in an average family of 4-5 members, owns at least 3 to 6 smartphones with an average price range of about 5K INR. In addition, mid-class families are forced to go for many of the online subscriptions and other gadgets which are avoidable. More than holding a smartphone, due to social pressure they are forced to upgrade or change the phones within an average time frame of 2-3 years.

  • Due to additional gadgets, each family spends an extra about 20K on a yearly average.

3. Weekends Eating Out:  

Now the culture in most of the cities mid-class Indian families is to go out unnecessarily on weekends and have food from outside, instead of having homemade food. In addition to the cost of the food, most of the families end up spending more money on the medial due to this spoiled lifestyle.

  • Due to eating out each mid-class family is ending up spending about 3 to 5K each monthly average I.e. about 30 to 50K extra on a yearly average.

4. Brand Consciousness:

Most of the mid-class youngsters now become the victims of the brand consciousness for dress, salons, and for many the consumable items. By buying branded products, we may get quality products but we are ending up spending about 3 to 4 times the value for money.

  • Due to brand consciousness, each family spends about 30K to 40K extra in an average year.

5. Commercialization of basic needs:

Now, most of the basic needs like a hospital, school, etc of the mid-class family become commercialized and end up paying 3 to 5 times the cost. Due to social status, most parents are unable to send their kids to a normal school. To get admission in commercialized schools they need to pay the donation of about 50k to 1 lakhs on average and yearly they end up paying an extra about 10 to 20K in the name of special fees or extracurricular activities.

In the matter of hospital, in the name of better facilities, families are forced to pay about 3 to 5 times the extra cost for the same treatment, which they can get from a normal hospital.

  • Due to the commercialization of the basic needs like hospitals and schools, each family in an early spend about 30 to 40K extra in an average year.

6. Extra spending for Birthdays and Anniversary:

Earlier Birthdays and Anniversaries are the days for getting together and spending time with families, but now most of the mid-class families consider it as a special event and end up spending more money for the celebration and get together in outside places like hotels and resorts. Most of the families are now ready to send about 2 to 3K only for the cake for celebrating it.

  • Due to unnecessary spending on each of the special events, each of the mid-class 4 member families end up spending an average of about 15K extra per year.

7. Spending lavishly for the family functions:

Now due to social pressure, most of the mid-class Indian families are forced to spend money to make the weddings and family functions a grand function. Most of the families spend money lavishly for stage decoration, photography, and food for marriage just to satisfy the gusts.

  • Due to this, an average family ends up paying early about 50K, considering one event in 10 years with spending of about 3 to 5 Lakhs.

8. Easy Loans and Credit facilities:

Due to the easy availability of personal loans and credit cards, most of the youngsters had a tendency to spend what they haven’t yet earned. They are not knowing the fact that due to these loans and the credit facilities they are actually spending about double the actual need to spend. More than that extra spending nature may lead to end up in credit card traps.

  • Due to easy loans and credit cards, on average, a person spends about 20 to 30K per year extra money in their purchase decisions.

9. Automobiles as a status symbol:

Many families in India buy luxury cars as a symbol of status. Most of the Mid class families are forced to buy luxury cars instead of general-purpose mid-class cars due to social status pressure. Due to this most of the families end up paying 2 to 3 times the cost for owning a car.

  • Due to these luxury cars, families spend an extra about 30K on a yearly average as interest on the EMI.

10. Unnecessary beautification:

Nowadays most the families tend to spend lakhs of money on the house and office interior modifications, which not making any value addition to our life. This also causes to increase in the yearly maintenance cost as an overhead.

  • Due to this unnecessary beautification and its maintenance, an average family spends about 15K to 20K yearly, considering a one-time cost of about 1 to 3 lakhs and yearly extra charges of about 5K to 10K INR.


If we sum up all the above extra yearly average costs as listed below, each mid-class Indian family ends up spending an extra of about 2.5 to 3 lakhs in a year.

  • Vacations based on Social Pressure: 10K
  • Smartphone and other Electronic gadgets: 20K
  • Weekends Eating Out: 40K
  • Brand Consciousness: 30K
  • Commercialization of basic needs: 30K
  • Spending for Birthdays & Anniversary: 15K
  • Spending lavishly for the family functions: 50K
  • Easy Loans and Credit facilities: 20K
  • Automobiles as a status symbol: 30K
  • Unnecessary beautification: 15K

Total extra average Indian family spending: 2.6 Lakhs in a year.

If we are copying others’ lifestyles without planning our own financial needs, it will lead to lots more financial stress and anxiety over the years.

All the above-mentioned expenses are easily controllable and we can save at least 1 to 2 lakhs on a yearly average.

We also recommend you follow the listed books to strengthing your financial knowledge of the Indian environment.

If you would like to share your thoughts, please comment below in the comment box for the benefit of other readers.

Thanks and Regards.



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Harry J P is a Business development and sales professional passionate about sharing knowledge in the domain of sales, and personal finance which helps in Personal financial learning for newbie earners. This blog came out of the experiences in the domain of personal finance, business development, and the share market.

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