It is a heavy feeling right now if you are staring at your personal finances. Your investments in equity markets are rudderless due to diverse stakeholder views. While Indian institutional investors are committed to supporting Indian listed companies due to their respective scheme mandates, foreigners are finding faster profit growth and cheap valuations in Korea, Taiwan and a few US tech companies.
To add to that, there is uncertainty due to persistently rising fuel prices, rupee depreciation, and inflation risks. All of that is set to ensure that interest rates stay where they are for now and potentially could rise if inflation surges. The latest wholesale or producer price inflation was significantly higher than the inflation we see for goods and services we consume. Typically, the gap narrows as prices settle or producers pass higher input costs on to us. The chances of you and me bearing these high costs are much higher.
A wealth manager friend in Mumbai flagged a concern in the middle of the big-picture story, which is increasingly sour. They argued that the indebtedness of Indian households will now trouble many, forcing cuts in expenditure and loan restructuring.
From pre-COVID days in 2019 to date, personal loans account for a third of banks' total outstanding non-food credit, compared with a quarter earlier. That is based on comparable RBI data as of February 2026. Growth in credit card loans, other personal loans, consumer durable loans, and loans against jewellery is much faster than that of housing loans. While total non-food credit is up 2.5 times, personal loans are up nearly 3.5 times.
That shows you piled up on loans, as “You Only Live Once” (YOLO) became the household mantra post-COVID. While owning a home remained a strong need, living a better life, eating well, and travelling like never before led people to live beyond their means. The case in point is Apple's trend in iPhone sales in India. In 2019, Apple sold 15 lakh phones. In 2025, that number jumped to 1.5 crore. It was enabled through equated monthly instalment schemes through personal loans.
When financial conditions are tightening, as many experts warn, you need to step back and review your financial situation. Over the next few weeks or months, many of you are likely to face stress on your income as companies slash their workforce. If you are in the IT services sector, you are likely to be at the receiving end if you are not ‘upending’ your skills. A single IT services job, or the so-called ‘white-collar’ job, creates 4-5 blue-collar jobs to provide support services. The overall urban consumption was a problem even before the crisis emerged in West Asia. The latest round of job cuts could further hurt employment prospects and slow demand for goods and services.
You need to choose wisely when it comes to your spending. Make a list of items that you need and those you want. Prioritise your needs ahead of your wants. Prime Minister Narendra Modi advised citizens last week to practice austerity when purchasing gold and jewellery and when travelling abroad. You need to step back and check whether it's possible to utilise the idle gold in the bank locker for new family events rather than buying more on the market. Gold as an investment is not a great idea when prices are near a record high. Instead of piling on more loans for lifestyle spending, you may want to pay off outstanding loans. It is not a good idea to compromise your long-term savings by stopping your systematic investing. If you work with a professional financial advisor, it is a good time to discuss all these issues and rejig your finances. If you do not have any, you need to do your own research or consult an advisor.