Hello sir,
I am 38 year old working lady with 2 kids 11, 6 years. As a family we earn 2.25L per month (Sal + 25K rent). Have a home loan about 1CR. About 10L in PF acct for both. 5L in FD as emergency cash. Please guide what other things I can do or must do to secure the family.
Ans: You are a 38-year-old working woman. You have 2 school-going children. Your total family income is Rs. 2.25L per month including rent. You are paying a home loan of Rs. 1 crore. You have Rs. 10 lakh in PF and Rs. 5 lakh in FD.
Your question is sincere and responsible. You want to secure your family. Let’s look at all areas step by step.
? Family Income and Financial Strength
– Monthly income of Rs. 2.25L is strong and stable.
– You have a rental income of Rs. 25,000. That gives extra safety.
– Your emergency fund of Rs. 5L in FD is very thoughtful.
– You have Rs. 10L in PF combined. That adds long-term support.
– You are on the right path already. Appreciate your effort.
? Home Loan and EMI Impact
– Rs. 1 crore loan is a big responsibility.
– Monthly EMI may take a large part of income.
– Check if you are paying more than 35% of income on EMI.
– If yes, then reduce other big expenses.
– Don’t rush to prepay the loan aggressively now.
– Invest and grow wealth in parallel.
– Let the loan run if interest is low.
– Focus more on building financial assets alongside loan.
? Emergency Fund Position
– Rs. 5 lakh in FD is a good step.
– But for your income level, increase it to Rs. 7–8 lakh.
– This should cover 4 to 5 months of expenses.
– Include EMI and school fees also in that.
– Keep this fund only in FD or liquid mutual fund.
– Don’t mix this with long-term investments.
– Maintain it always. Don’t break unless emergency comes.
? Importance of Health Insurance
– Do you have a separate health insurance outside employer cover?
– If not, please buy one immediately for all four.
– Family floater policy for you, spouse and kids is a must.
– Medical inflation is rising every year.
– Corporate cover ends if job ends.
– A personal health cover is must-have.
– Also check if your parents are financially dependent.
– If yes, consider a senior citizen health cover for them too.
? Life Insurance Needs
– If you are the main income earner, then term insurance is must.
– Buy only pure term insurance, not ULIP or money-back plans.
– These investment-insurance mix plans give poor returns.
– ULIPs have high charges and very long lock-in.
– Check your current insurance policies.
– If they are traditional endowment or ULIPs, stop future premiums.
– Surrender and reinvest the surrender amount in mutual funds.
– Term insurance must be at least 10–15 times your yearly income.
– That gives enough protection for your children and spouse.
? Children's Education Planning
– Your kids are 11 and 6 years old.
– College expenses will begin in 6 to 10 years.
– You need separate investments for their higher studies.
– Start SIPs in 2-3 actively managed mutual funds.
– Equity mutual funds with a 7–10 year horizon are ideal.
– Avoid index funds. They just mirror the market.
– Index funds fall badly during crisis and don’t protect value.
– Actively managed funds are monitored by fund managers.
– They help reduce downside in tough markets.
– Start two SIPs separately—one for each child.
– This gives purpose and structure to your saving.
? Regular vs Direct Mutual Fund Route
– Avoid direct mutual funds through online apps.
– These don’t offer expert handholding or behavioural guidance.
– Direct funds are confusing if market falls.
– Regular plans via a Certified Financial Planner are better.
– CFP offers full 360-degree guidance.
– They review goals, risk, taxes, and adjust plans.
– Regular funds may have small cost but high peace.
– MFDs with CFP credential keep you focused and calm.
? Retirement Planning for You and Spouse
– Retirement will come in next 20 years or so.
– EPF is a good start but not enough.
– You will need large retirement corpus.
– Start equity mutual fund SIPs for long-term growth.
– Choose multi-cap or flexi-cap mutual funds with 10+ year vision.
– Review progress once in 6 months.
– Do not use these funds for kids or home loan.
– Retirement should be a separate priority.
? SIP Allocation Strategy
– Your family income is Rs. 2.25 lakh monthly.
– After EMI, rent, school fees, and household, you will have some surplus.
– Use that to invest through SIPs.
– Split SIPs into short-term and long-term.
– Short-term for child’s school fees or holiday.
– Long-term for higher education and retirement.
– This keeps purpose clear and investment focused.
? Tax Saving Plan
– You already have PF for deduction under Section 80C.
– Also check your term insurance premium.
– Avoid locking all 80C into policies or ULIPs.
– Instead use ELSS (tax-saving mutual fund).
– ELSS gives you growth and tax benefit both.
– Limit your FD usage to emergency only.
– FDs give low returns and are taxable.
? Will and Estate Planning
– You are a parent. You must write a will.
– Decide how assets should be passed.
– Nomination is not the same as a will.
– A will avoids family disputes later.
– Also teach basic finance to your spouse.
– Both should know bank, mutual fund, and insurance details.
– Keep all documents in one place.
– Update them every year.
? Protecting Children’s Future
– Make sure both kids have their education investments set.
– Review these SIPs once a year.
– Don’t touch this money for other use.
– Talk to them about money slowly.
– Teach saving and budgeting in small ways.
– Children learn from parents more than school.
? Avoiding Risky or Unfit Options
– Don’t invest in gold schemes or chit funds.
– Don’t buy real estate for investment now.
– Real estate brings stress and low liquidity.
– Avoid crypto or hot stock tips.
– No gambling with children’s future.
– Keep your focus on mutual funds with clear goals.
? Debt Management Strategy
– Review your home loan interest rate.
– If it’s above 9%, try to reduce it.
– Ask bank to recheck the rate slab.
– Don’t take personal or credit card loans.
– Avoid EMI purchases unless essential.
– Keep your CIBIL score healthy.
– Good credit history helps your kids later also.
? Review and Adjust Every 6 Months
– Financial plan is not one-time job.
– Markets and life both keep changing.
– Sit with your CFP every 6 months.
– Re-check your investments and goals.
– Adjust SIPs, targets, and fund allocation.
– Stay flexible but stay committed.
? Plan for One-Time Big Expenses
– Kids’ school fees, house repairs, travel plans need yearly funds.
– For this, use a short-term mutual fund.
– Keep this amount ready in 6-month horizon fund.
– Don’t disturb retirement or children’s SIPs.
? Keep Family Involved in Financial Planning
– Sit with your spouse once every 3 months.
– Share all updates of insurance, investments, debts.
– Include older children slowly in talks.
– This builds awareness and reduces confusion.
? Stay Disciplined and Keep Emotions Away
– Don’t get scared in market falls.
– Don’t stop SIPs when market drops.
– Volatility is part of investing.
– SIPs actually benefit in falling market.
– Keep emotions out and system in.
? Use Professional Guidance Regularly
– A Certified Financial Planner sees things in 360 degree.
– They know your risk, income, goals, and taxes.
– DIY methods fail in emotional moments.
– Let a CFP and MFD guide your family.
– Regular reviews keep plan on track.
? Final Insights
– You are already doing many right things.
– Now give your plan a proper structure.
– Secure your insurance, emergency fund, and health cover.
– Separate long-term and short-term goals clearly.
– Build wealth through mutual funds in regular mode.
– Avoid bad products like ULIP, gold schemes, and real estate.
– Keep teaching your kids slowly about money.
– Stay calm and keep reviewing regularly with a CFP.
– Your family’s future will stay protected and comfortable.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment