Hello sir/ma'am, My daughter gave NEET UG this year, this was her 3rd attempt, but she didn't score enough to get a seat in government medical college. although she has taken admission in bsc microbiology in a local college but she is not satisfied with that college and doesn't want to pursue that course.We are really worried about her future.What should we do?Please guide us.

Ans: Your combined household income is Rs. 3.8 lakh monthly, a commendable financial position. You also have consistent investments and moderate liabilities. The key objectives are:

Early repayment of loans (Personal loan of Rs. 55 lakh).
Building a retirement corpus of Rs. 5 crore.
Securing educational and financial needs for two children.
To achieve these goals, a disciplined and strategic financial plan is essential.

Assessing Current Cash Flow
Your income is Rs. 3.8 lakh monthly, and liabilities total Rs. 93,000 (including your SIPs and PPF).
Fixed commitments take approximately 24% of your income.
The remaining 76% (approx. Rs. 2.87 lakh) is your disposable income.
Key Action:

Allocate 50% of the disposable income for systematic repayment of loans.
Use the remaining for building a robust investment portfolio.
Loan Repayment Strategy
Reduce Personal Loan Burden
Prepay 10–20% of the loan principal annually if no penalty applies.
Channel surplus funds (Rs. 1.43 lakh monthly) into prepayments.
Renegotiate Loan Terms
Approach your lender for lower interest rates.
Consolidate high-interest loans, if feasible, to a lower-cost option.
Minimise EMI Load
Avoid taking on new debt.
Redirect bonuses, incentives, or windfall gains towards your loan principal.
By focusing on early repayment, you can save significant interest and free cash flow sooner.

Strengthening Investments
Balanced Asset Allocation
Your current investments in SIPs, PPF, and postal RD are well-diversified. To enhance growth:

Continue SIPs of Rs. 10,500 but aim to increase SIP amounts yearly.
Invest surplus funds in actively managed mutual funds (growth-oriented).
Maintain PPF as a low-risk debt investment option.
Align with Long-term Goals
For a Rs. 5 crore retirement corpus:

Increase monthly investments as loan liabilities reduce.
Focus on equity mutual funds for long-term wealth creation.
Planning for Children’s Education
Education expenses for two children will rise as they approach higher studies.

Key Recommendations:

Start earmarking separate investments for their education.
Use balanced or hybrid funds to align with education timelines.
Set aside 25–30% of your annual bonus for this purpose.
Emergency Fund Maintenance
Your emergency fund in RD and PPF is adequate for now.

Suggestions:

Maintain 6–12 months’ expenses as a liquid contingency fund.
Use FD or liquid funds to ensure accessibility and stability.
Tax-efficient Investment Planning
With new tax rules, focus on minimising tax liabilities on investments:

Equity mutual funds: Long-term capital gains (LTCG) above Rs. 1.25 lakh are taxed at 12.5%.
Diversify into hybrid and debt funds to balance risk and tax efficiency.
Leverage Section 80C for PPF and SIP investments.
Key Financial Habits to Adopt
Review your financial goals and plans annually.
Avoid over-diversification. Too many funds dilute returns.
Automate savings and investments to ensure discipline.
Final Insights
Balancing loan repayment, investments, and education savings is achievable with a structured plan. Focus on systematic investments while steadily reducing your debt. This will free cash flow for long-term goals like retirement and children's education.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment