Summary of "Dream Life on ₹35K Salary | Psychology of Money | DEEPAK BAJAJ"
The video "Dream Life on ₹35K Salary | Psychology of Money | Deepak Bajaj" explores how financial well-being is more influenced by one’s mindset and money psychology than by the actual income. It focuses on practical psychological insights and budgeting strategies to help individuals manage their finances effectively even on a modest salary of ₹35,000 per month.
Main Financial Strategies and Business Trends Presented
- Understanding Hedonic Adaptation
- The brain quickly adapts to new levels of income or possessions, making initial happiness from salary increases or purchases short-lived.
- This leads to constantly rising baseline expenses, causing people to feel broke despite higher earnings.
- Solution: Fix a baseline living cost and maintain it regardless of salary increases, investing the surplus instead.
- Kakibo Budgeting (Expense Awareness)
- Track every expense and question whether it was necessary or impulsive.
- Increased awareness reduces impulsive spending and helps control finances better.
- Zero-Based Budgeting (ZB)
- Assign every rupee a specific role in the budget so that at the end of the month, the balance is zero—not because money ran out, but because every rupee was allocated.
- Helps in controlling impulsive spending by showing how overspending in one category affects another.
- Modern version: Envelope or digital wallet method where each category has a fixed amount and spending stops when the envelope is empty.
- Mental Accounting Trap
- People mentally separate money into different "buckets" (salary for bills, bonus for spending, tax refund for treats), which leads to irrational spending.
- Treat all money as a single pool aimed at financial growth to avoid unnecessary luxuries and impulsive expenses.
- Research shows bonus money is spent three times faster than regular income, so caution is needed.
- Present Bias and Gamification
- Humans prefer immediate rewards over delayed benefits, which hinders saving and investing.
- Gamify financial habits by treating savings and investments as levels or competitions, rewarding short-term achievements to trigger dopamine and reinforce good habits.
Five Practical Tips for Building Wealth on ₹35,000 Salary
- Automatic Saving
- Set up auto-debit for savings as soon as salary arrives to pay yourself first and avoid visible money being spent impulsively.
- Anchoring Effect
- Change mindset by anchoring to a higher saving goal (e.g., ₹5,000 SIP growing at 12% CAGR) to motivate consistent investment and wealth building.
- Avoid Subscription Trap
- Cancel unused subscriptions (OTT, gyms, apps) and redirect that money into investments.
- Wealth Identity Shift
- Shift self-identity from “I want to save money” to “I am a wealth builder” to reinforce positive financial behavior.
- Respect Money and Balance Spending
- Recognize that circumstances change; spend some money for present needs but always save for the future.
Summary Message
Financial success is primarily a mental game. Without training your brain to overcome hedonic adaptation, present bias, and mental accounting traps, you will feel financially strained regardless of income. Wealth is first created in the mind and then reflected in the bank balance.
Presenter
Category
Business and Finance
