Hello Sir, i am. 37 years old. In hand salary is 62k and paying emi of homeloan 25k, personal loan 15k. I dont have any saving. Guide me how can i save for my 8months daughter.
Ans: That shows responsibility and intention. You are 37 years old, earning Rs. 62,000 in hand. You are paying two EMIs totaling Rs. 40,000 every month. You have no savings. Your daughter is just 8 months old. You want to save for her future. These are all important facts. We will now create a long-term, professional, yet simple plan for you—that covers emergency needs, education, growth, protection, and regular monitoring. Let’s proceed step by step with detailed insight, analysis, and a caring approach.
Assessment of Your Current Situation
You currently earn Rs. 62,000 after tax. You pay Rs. 25,000 for a home loan EMI and Rs. 15,000 for a personal loan EMI. That totals Rs. 40,000 in EMIs. This leaves you just Rs. 22,000 for all the rest of your needs—food, utilities, child costs, transport, and any other expense. You do not have any savings. This situation is fragile. Any unexpected expense may derail your budget. You are running on a very tight rope.
The fact that you are aware of this and asking for guidance is already a positive sign of responsibility. Your priority now is to stabilize your finances, build a small buffer, control monthly cash flow, and then start investing for your daughter’s future.
Priority One: Create an Emergency Buffer
When paying two EMIs leaves you so little, building a buffer even of Rs. 20,000 is critical. This can be done in small steps, without strain.
Set a goal of having at least Rs. 20,000 as immediate buffer.
Start by saving Rs. 2,000 each month for ten months.
You can call this your “liquid mini fund”.
Use a simple recurring deposit at your bank, or a liquid mutual fund.
Keep this buffer untouched. It will help when unexpected costs like medical bills or child needs arrive.
Without a buffer, any small emergency will push you off track and create stress.
Priority Two: Trim Expenses & Increase Income
With only Rs. 22,000 left after EMIs, you must maximise savings potential.
Expense Review
Track your expenses for a month. Note every rupee. Then categorise:
Essentials: Food, commuting, utilities, child care.
Non?essentials: Subscriptions, eating out, gifts, impulse purchases.
Aim to reduce non?essential spending by at least 40–50% for the next 6 months. Examples:
Cook at home more often.
Use public transport or carpool.
Cancel OTT apps not used often.
Reduce energy usage at home.
Avoid buying new clothes unless needed.
This can easily free Rs. 3,000–5,000 per month for savings or loan prepayment.
Income Enhancements
If possible, explore small ways to slightly boost income:
Work-from-home tutoring or part-time assignments.
Weekend gigs or online work.
Sell unused items in your home.
Even earning Rs. 2,000 extra per month can help lighten your burden.
Priority Three: Push for Personal Loan Repayment
Your two loans are:
Home loan EMI: Rs. 25,000/month (long term)
Personal loan EMI: Rs. 15,000/month (short term)
Your total EMI burden is 64% of your income. Once your emergency buffer is in place, focus on paying off the personal loan quickly.
Even an extra small amount from trimmed expenses and/or extra income should go into this loan. For example:
Put Rs. 2,000 from expense cuts
Add Rs. 2,000 from side income
Allocate Rs. 5,000 if possible
This extra Rs. 9,000 goes into the personal loan EMI directly. That reduces the principal faster and saves you a small amount of interest. Since this loan will end in less than five years, it is a good candidate for early repayment.
Once you finish this loan, you will save Rs. 8,000 in EMI, plus whatever extra you were paying. That money can then be gradually diverted into savings and child plans.
Priority Four: Build Long?Term Savings for Daughter
Once the personal loan is nearly finished (2–3 years), you should start building for your daughter’s future goals—such as education. She is eight months now. You have roughly 17 to 20 years to build a corpus.
However, given limited cash flow now, you must start very small.
Step 4.1: Open a small mutual fund SIP
Only after your personal loan EMI finishes or EMI relief begins:
Begin with Rs. 2,000 per month in an actively managed mutual fund.
Use regular plans through a certified mutual fund distributor with CFP credentials.
Do not go for direct plans now: you need support to choose, review, re-balance.
Avoid index funds: they follow the market blindly and may falter during downturns because they cannot avoid troubled stocks. Actively managed funds give some safety cushion by letting fund managers exit bad holdings early.
The initial small amount will grow into a good habit and build discipline.
Step 4.2: Increase SIP over time
Once you fully repay your personal loan (in 3–4 years), add at least Rs. 3,000 monthly to SIP. Gradually increase SIP to Rs. 5,000 in 5–6 years, and Rs. 10,000 by the time she is 6–7 years old. This will let your corpus grow significantly and give you time to make regular adjustments as life evolves.
Priority Five: Insurance and Protection
At 37 with a young daughter, you need insurance protection.
Life Insurance
Take a pure term plan for yourself with a sum assured of minimum 10 times your income till daughter becomes financially independent (say 18 years from now). For example, Rs. 1 crore cover ideally.
Term insurance is cheap and gives high cover. Do not choose LIC endowment or ULIP plans—they generally have high cost and low returns. If you already hold such plans, ask your Certified Financial Planner to review. If lock-in is passed and returns are poor, consider surrendering and reallocating into mutual funds.
Health Insurance
Get a family floater plan that includes you, your spouse, and daughter. A cover of Rs. 5 lakh is good to start. Health costs can derail financial plans, so insurance defends your emergency buffer.
Priority Six: Continuous Budgeting and Discipline
Use simple budgeting apps or even a notebook to log expenses each day.
Make a snapshot budget every month; compare actual expenses to planned.
Adjust small things quickly if you overspend.
Keep your financial goals visible—build buffer, repay loan, invest for daughter.
Celebrate when you repay the personal loan. Then redirect EMI money and invest.
Roadmap for the Next 7 Years
Year 1:
Save Rs. 24,000 into the buffer.
Trim expenses to free up Rs. 5,000 monthly.
Boost income by some side work.
Start small SIP once personal loan gets closer to finish.
Year 2:
Buffer is now Rs. ~24,000.
Add Rs. 3,000 monthly to buffer until Rs. 50,000.
Continue trimming expenses.
Pay extra on personal loan.
Begin steady SIP of Rs. 2,000.
Year 3:
Personal loan likely nearly paid.
Allocate EMI amount plus extras into mutual fund SIP.
Daughter now 3 years old—corpus building begins.
Keep insurance active and updated.
Years 4–6:
Personal loan fully paid by start of Year 4.
SIP increases to Rs. 5,000–7,000.
Buffer kept at Rs. 1 lakh.
Review fund performance yearly.
Adjust SIP to Rs. 10,000 by Year 6.
Years 7–10:
SIPs of Rs. 10,000 rolling for daughter’s education.
Home loan EMI is lower now with amortisation, freeing more cash.
If salary increases, take insurance premium increases or investments further.
Mistakes to Avoid
Do not miss any EMI payments.
Do not invest in stocks directly now—build financial runway first.
Avoid index funds—they lack active protection during downturns.
Do not touch buffer or move it for any small purchase.
Reinvest any tax refund into SIP or buffer, not splurge.
Do not buy insurance-cum-investment plans—only pure term and health.
Regular Reviews and Professional Guidance
Every six months, review your budget, loan balances, savings, and insurance with your Certified Financial Planner. They can help you stay disciplined, adjust SIP amounts, choose better funds, and ensure you meet your goals.
A CFP with an MFD background can support you in:
Selecting right mutual funds and creating small portfolio
Managing insurance in a cost-efficient way
Tracking corpus progress for daughter’s education
Aligning tax filings and planning for mutual fund withdrawals in the future
Setting Your Daughter’s Future
Your daughter has 17 years till adulthood. That is great time to build a strong corpus. Even with small SIP:
Rs. 2,000 monthly for 10 years with moderate returns can become a large educational fund.
Increase SIP over time with income growth and EMI freedom.
Your slow, steady, and disciplined path can give her financial security for school, college, and beyond.
Finally
You already earn and manage important responsibilities. You have shown real intent. By following this roadmap:
Build small buffer first.
Reduce expenses and boost income carefully.
Prioritize loan repayment.
Begin small SIPs as financial runway strengthens.
Get pure insurance cover.
Stay disciplined with budgeting.
Increase investments gradually.
Track progress with your Certified Financial Planner every 6 months.
This 360-degree plan will stabilize your situation, free up future cash, and build a steady fund for your daughter’s future.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
