News reports tell us that we are both consuming and saving less. Let’s look at consumption first. What data actually tells us is that the rate of growth of consumption has slowed, and not absolute consumption. In absolute numbers, India’s household private consumption expenditure in 2023, according to World Bank data, was $2.25 trillion up from $2.04 trillion in the previous year. However, the rate of growth has dropped from 5.9% to 5.35% over this time. But compare the share of household spends to Gross Domestic Product (GDP) across a decade and you see growth in its share — from just under 58% in 2013 to over 60% in 2023 — and this is on an expanding GDP number.

Within this data lies another story — our overall allocation to food in Indian household budgets is down, a sure sign of a non-poor country’s consumption pattern. A working paper (you can read it at tinyurl.com/3fpattbe) marks the fall in the share of food in household consumption to below 50% of total monthly household spends since 1947. As a nation, we are spending less on food not because we are eating less, but because rising incomes over time are allowing spending on non-food items. In addition, within food, we are eating less cereals, more proteins and fruits than before. The paper also marks the rise of served and packaged processed food overall and especially for the urban top 20% of the population. Yes, the quick delivery apps are having an effect on how we spend and what we spend on. These are not signs of a faltering consumption pattern.

We are also saving less it seems. Headlines are all about household savings down to 5.3% of GDP in 2022-23, from 7.3% in 2021-22, and this translates into an absolute drop of around ₹9 trillion over the year. There are three problems with this quick conclusion. One, this is just the share of financial savings and does not include home ownership as an appreciating asset. One analysis (tinyurl.com/338pazmc) finds that there has been a significant rise in physical assets over the time period. We are shifting money from one asset to another and taking on some debt to do so.

A second factor not considered in the drop in savings story is the role of losses in equity futures and options (F&O) trades by retail investors. A study by the Securities and Exchange Board of India (Sebi) (tinyurl.com/27nnnt5z) has estimated these losses to be around ₹1.8 trillion for individual traders for three years ending 2023-24. Such huge losses hide an uglier truth — some of the losses are much deeper since they are based on loans taken in the hope of profits. Sebi has since tightened the rules to stop uninformed retail investors from treating the F&O market as a gambling den and the impact is already visible with lower trading numbers. If people can’t be sensible about their money, the regulator will need to step in even further.

A third factor that contradicts the fact that Indians are saving less is the rising allocation to cryptocurrencies. While correct data is difficult to get, one estimate (tinyurl.com/ycxaandd) puts the value in 2024 at $6.6 billion or just over half a trillion rupees. Other estimates put this number much higher at more than double that. Whatever the number, what is true is that a growing proportion of savings in Indian households is sitting in this digital currency rather than being put to productive use in equity or debt. People are not saving less; they are gambling with their money!

When you add up all three subtexts of the headline-grabbing numbers, a different story begins to emerge of the Indian saver. He is leveraged to buy both real assets and for gambling on F&O. He is also gambling with crypto expecting multiplier growth rather than a staid FD return or a less-than-exciting 10-14% growth on the stock market over time. The young, quick-delivery-minded Indian individual also wants quick returns, but while Swiggy and Zepto will deliver on time, effortless jackpot returns are a chimera, a lie sold by snake oil salesmen on social media channels.

Your money lesson for 2025 is very simple — do not panic because of rabble-rousing influencers or headlines. You need to have debt under control — no more than 30% of your take home for an appreciating asset like your own home that you live in. You need to have your emergency fund in place — at least six months of living expenses in your fuddy-duddy but safe fixed deposit. You have the right medical and life insurance in place. And you are diversified between debt and equity, and within equity you are diversified between high, medium and low-risk parts of the market. If all this is in place, your money will ride 2025 smoothly, as it will for the rest of your life.

Monika Halan is the best-selling author of the Let’s Talk series of books on money.The views expressed are personal