Is a Monthly Salary of 1 Lakh a Significant Milestone for Young Professionals in Pakistan?

Karachi resident, Ali Hassan, earns a little over 1 lakh every month, a goal he has been working towards since he started his career five years ago. While it allows him to maintain a decent lifestyle, he feels that it's still a modest income considering his expectations. "I've had to cut back on eating out to make ends meet," he mentions.

Hassan starts his day with a visit to the local gym, which costs him 8,000 for a three-month subscription. He commutes to work on his motorbike, which he bought earlier this year for 80,000, as public transport options became less reliable. "Petrol prices keep rising, and commuting has become expensive," says Hassan, who works as a software engineer.

Hassan allocates approximately 70% of his salary to rent, utilities, and loan repayments, with 15% reserved for groceries and personal expenses, leaving only 15% for savings and investments. "1 lakh may seem like a lot, but in a city like Karachi, it only provides a moderate lifestyle. Supporting a family on this income would require significant adjustments," he explains.

For Lahore-based Sana Malik, her monthly expenses tell a different story. Living with her family allows her to save on rent and share household bills. "If I were living independently in Lahore, where my office is located, my salary would barely cover rent," says the 25-year-old marketing professional.

For a recent graduate like Hasan Ahmed, earning 1.2 lakh per month seems like a dream come true, but he believes it's still insufficient. "There are always expenses that remain unfulfilled or out of reach," says the 24-year-old, who completed his engineering degree in the UK. Additionally, Ahmed is repaying a 20 lakh education loan, which consumes a significant portion of his income.

Young professionals across Pakistan share similar sentiments about the challenges of living comfortably on a 1-1.2 lakh monthly salary. It may seem like an impressive figure, but when factoring in rent, bills, groceries, domestic help, and lifestyle expenses, especially in metropolitan areas, it falls short.

As inflation continues to rise, the situation becomes even more challenging. Zainab Ali, a freelance content writer in Islamabad, states, "I spend 50,000 every month on basic necessities. Transportation costs are soaring, and healthcare expenses are draining our pockets." Despite these challenges, the 28-year-old feels self-sufficient with her monthly income of 90,000-1.2 lakh after taking care of her expenses.

Rising Aspirations

One common reason for the 1 lakh salary figure falling short is the rise in aspirational spending. Dining out with friends or family can easily cost 2,000-3,000 per person in major cities. Many individuals also allocate a portion of their budget for travel, which can take up 10-20% of their monthly income.

However, this often comes at the expense of savings and investments. Hasan Ahmed, for instance, has yet to start investing due to limited disposable income after covering essential expenses. "I have a side business that takes up my remaining income," he reveals.

Mehreen Khan in Islamabad believes that one can lead a comfortable life on this salary, provided there aren't significant financial obligations. "Managing multiple loans and living comfortably on this income can be challenging, as you also need to save for the future," she suggests.

The number of years it takes to reach the 1 lakh range and other financial responsibilities play a crucial role. For Asad Riaz, 30, who supports his parents and invests for the future, a salary just above 1 lakh leaves little room for extravagance. "It took me about five years to reach an annual salary of 14 lakh, which still feels inadequate given the cost of living in Islamabad," he mentions.

However, this income has allowed Riaz to fulfill his dream of traveling abroad. "I could take my first international trip to Dubai after crossing the 12 lakh per year mark. Now, I'm saving for Europe," he happily shares.

For Ahmed Ali, 27, his current salary enables him to indulge in one luxury he cherishes the most—staying at 5-star hotels during vacations. "I don't think twice before spending on things I enjoy. Recently, I purchased a membership at a premium gym for 15,000, something I wouldn't have done earlier," he proudly states.

Getting a Head-start on Investing

The 1 lakh income range provides young professionals in Pakistan with enough disposable income to begin investing. Ali has been working since he was 22 years old but only started investing recently after receiving a significant pay raise. "Previously, I would spend most of my income on rent and necessities, leaving little room for saving. Meaningful savings and investments became possible after my income exceeded 90,000," he explains.

While financial planners argue that it's essential to start investing early, Ali believes that waiting for a higher income is more enjoyable. "Saving a small portion of my income doesn't take away the joy of newfound financial freedom," he asserts. Currently, Ali invests 20% of his salary and sets aside another 20% for emergencies and short-term needs.

The 1 Lakh Dream Salary

Young professionals in Pakistan no longer see a six-figure monthly income as the ultimate benchmark for career success. Inflation and increasing aspirations have made it challenging to sustain a comfortable lifestyle with this salary. "While 1 lakh may not be the standard, it's more attainable if you work in the private sector, especially in cities like Karachi, Lahore, or Islamabad," says Ali.

Industry experts agree. Farah Khan, co-founder of CareerLink Pakistan, notes, "2 lakh is the new 1 lakh. The expectations of young professionals have shifted." Entry-level salaries have also risen to meet rising demands. "Average pay packages for junior and mid-level positions have grown by 18-20% in the last five years," says Ahsan Ahmed, HR Director at PakistanJobs.com.

However, earning 1 lakh per month still reflects a certain social status, especially in smaller cities. Many individuals choose not to disclose their salaries to avoid undue expectations. Ali Hassan chuckles and mentions, "I don't openly discuss my income with friends in Multan. It's still considered a substantial amount in smaller towns and can create unrealistic expectations."

Hasan Ahmed adds a humorous note, "In the marriage market, a 1 lakh salary is highly desirable. People see it as financial stability."