I'm 30, married and have a girl child of 10 months old. My take home salary is 1,18,000 per month and only single earning member of my family. I don't have a SIP, but every month after my salary is credited, within 5 days I invest 10000 in mutual fund and 5000 in NPS. I give 10,000 every month to my wife, in which she invests 5000 in gold buying plan and remaining 5000 for her expenses. My Mutual Fund investment is 2,28,000 and its current value is 2,71,000. My NPS investment till now is 1,07,000 and its current value is 1,18,000. I have gold jewels of 50 sovereign. I live in a rented house of 12000 per month and my family monthly expenses are 20000. I don't have any cash savings because I had a family loan till now and cleared it very recently. I'm planning to buy a house worth 80,00,000 through loan. I don't want to get trapped into EMI for a very longer period, so I was thinking to sell the golds worth 20 lakhs and remaining 60 lakhs I'm planning to take loan and pay 70,000 EMI and finish the loan in 10 to 11 years and then divert that amount to buy gold. But somewhere I get a feel that my thought process is not right because after 11 years gold rates may be hiked nearly 2 times also. And also 70,000 EMI also feels riskier because it is more than 60% of my take home salary. So please advice how to proceed on buying house and how to arrange for funds with my available resources. One thing I can assure is my Job security.

Ans: You are in a pivotal financial phase.
You earn Rs. 1.18 lakh monthly.
You are the sole earner in a family of three.
You have a 10-month-old daughter.
You invest Rs. 10,000 monthly in mutual funds (lump sum).
You also invest Rs. 5,000 in NPS monthly.
Your mutual fund corpus is Rs. 2.71 lakh, NPS corpus is Rs. 1.18 lakh.
You gift Rs. 10,000 monthly to your wife (Rs. 5,000 for gold, Rs. 5,000 for expenses).
You live in rented accommodation for Rs. 12,000.
Family monthly expenses are Rs. 20,000.
You recently cleared a family loan.
You have no cash savings now.
You hold 50 sovereigns of gold.
You plan to buy a house worth Rs. 80 lakh.
You want to avoid long EMIs.
You plan to sell gold worth Rs. 20 lakh.
Take Rs. 60 lakh home loan with Rs. 70,000 EMI for 10–11 years.
You are wary because EMI would be ~60% of take-home.
You also think gold prices may double in 11 years.
Your job is secure.

Let us build a complete strategy for buying home and arranging funds wisely.

1. Assess Your Current Budget and EMI Capacity
Your total take-home income: Rs. 1.18 lakh.

Planned EMI of Rs. 70,000 is more than 50%.

Experts suggest EMI should be under 40% of income.

Yet, job security is high; but EMIs too high limit savings.

You have essential expenses of Rs. 32,000 (rent + family spends).

That leaves Rs. 78,000 discretionary.

EMI of Rs. 70,000 leaves little for investments and buffer.

This plan restricts financial flexibility and emergency readiness.

Insight: EMI structure must be reworked to support stable finances.

2. Review Your Proposed Funding Mix
You wish to sell gold worth Rs. 20 lakh.

Use proceeds to fund home down-payment.

Then take Rs. 60 lakh loan at Rs. 70,000 EMI.

Concern: gold may double in value by then.

Concern: high EMI strains cash flow.

Analytical Insight:

Gold is a non-income asset; selling may halt invisible pension.

EMI at 60% of income leaves little room for emergencies and raising child.

Child’s future expenses, education savings, and your retirement corpus may get delayed.

Recommendations follow for a balanced path.

3. Build a Cash Emergency Fund Before Applying for Loan
You have no cash savings now.
This is risky when taking home loan.
You must build at least 3–6 months of living expenses first.

Target: Rs. 2–3 lakh as a minimum buffer.
How:

Delay home loan by 3–6 months.

During this, divert your Rs. 10,000 monthly investment to savings buffer.

Once buffer is in place, emergency risk is mitigated.

4. Optimize Your Gold Asset Utilisation
You hold 50 sovereigns of gold.
Not all gold needs to be sold upfront.
Selling gold reduces your inflation hedge and potential gains.
But you also want to avoid high EMI.

Proposed plan:

Sell only gold worth Rs. 10 lakh.

Use those proceeds fully as down payment.

That reduces loan to Rs. 70 lakh instead of Rs. 80 lakh.

EMI on Rs. 70 lakh at 8% for 15 years is ~Rs. 67,000/month.

This is still high but better than Rs. 80 lakh EMI.

You retain gold as inflation hedge and child’s asset.

5. Select Loan Tenure Wisely
You aim for 10–11 year loan tenure.
Shorter tenure means higher EMI; longer EMI reduces EMI/balance stress.

Suggestion:

Opt for a 15-year loan at lower interest rate.

EMI around Rs. 67,000.

This reduces pressure compared to Rs. 70,000+ EMI.

This tenure also aligns with your child being 16 years old at EMI end.

It gives breathing room for education corpus building.

6. Structure a Balanced Post-Loan Investment Plan
Once down payment is done and loan is taken, you must allocate monthly surplus properly.

From Rs. 1.18 lakh income:

EMI: Rs. 67,000

Rent: Rs. 12,000

Family expenses: Rs. 20,000

Wife’s allocation: Rs. 10,000

NPS contribution: Rs. 5,000

Mutual fund investment: Refix your approach

This leaves Rs. 84,000 allocation cost → Surplus around Rs. 24,000.
(1,18,000 - 67,000 - 12,000 - 20,000 - 5,000 - 10,000 = Rs. 4,000)

Hold on: wife’s 10k includes her personal expense pipeline; count out separately.
So actual surplus after all necessary cash flows = ~Rs. 4,000.

This is not enough to save simultaneously.
You need to replan cash outflows carefully.

Recommendation: 3 steps:

7. Modify Wife’s Investment and Personal Cash Flow
Currently, wife receives Rs. 10,000 monthly gift.
She invests Rs. 5k in a gold buying plan and uses Rs. 5k for expenses.

When you sell Rs. 10 lakh gold, her gold savings reduce accordingly.
You can ask her to temporarily reduce gold savings to Rs. 2,000.
She can use the balance for monthly assistance or savings buffer.
This frees ~Rs. 3,000 extra monthly for your investment.

8. Re-allocate Your Monthly Savings Strategically
You currently invest Rs. 10,000 in MF and Rs. 5,000 in NPS monthly.

After loan EMI and reduced wife’s gold plan, you free roughly Rs. 7,000 more monthly.
You can allocate this as:

Keep NPS as Rs. 5,000

Invest Rs. 12,000 monthly in mutual funds or hybrid per structure below:

Revised distribution:

Equity SIP: Rs. 5,000

Hybrid balanced fund SIP: Rs. 3,000

Short-duration debt SIP: Rs. 2,000

Added reserve in liquid fund: Rs. 2,000

This helps maintain inflation resilience and risk management.

9. Roadmap for Loan Tenure and Prepayment
After EMI starts, plan to pre-pay extra when you get bonus.

For example, pay Rs. 1 lakh bonus into principal.

This reduces tenure and interest payout.

Maintain flexibility and review tenure every 1–2 years.

Stop prepayment only if family needs arise.

10. Preserve NPS and Maintain Tax-Efficient Investments
Maintain your Rs. 5,000 monthly NPS investment.

NPS is your retirement foundation; keep it ongoing.

Mutual fund investments give liquidity and growth flexibility.

Avoid index funds due to zero downside cushion.

Use actively managed equity and hybrid funds through regular plans.

Avoid direct funds due to lack of advisory support.

11. Build Longer-Term Emerging Goals
Your child is 10 months old; her education costs will arrive in 15+ years.
You need to begin education corpus planning separately:

Allocate a distinct education SIP of Rs. 5,000 per month.

Use a single diversified equity mutual fund.

Continue until she is 15; then move to balanced scheme near needed time.

Avoid mixing with home investment.

12. Create Future Buffer Using Mutual Foon Investments
You should create Rs. 1 lakh+ liquid buffer post EMI start.
You allocated Rs. 2k monthly to liquid fund.
This builds ~ Rs. 24,000 a year.
Use this for short-term needs, festivals, or emergencies.

13. Review Insurance Adequacy
You are earning Rs. 1.18 lakh; you need term insurance 15x earning → Rs. 1.8 crore.

Confirm if you have term cover that meets that amount.

You have no mention of term policy; arrange immediately.

Maintain existing health insurance for family.

Add coverage for child if needed.

Term insurance removes financial risk for your family if anything happens.

14. Regularly Monitor and Rebalance
Review your portfolio semi-annually.

Check equity vs hybrid vs debt proportions.

Shift investments if equity growth exceeds desired%

Revisit home loan tenure yearly.

Plan for major lumpsum payments with bonuses or increments.

15. Safeguard Against Mistakes
Avoid reducing salary pocket for EMI stress.

Don’t tie up cash in over?long gold saving plans.

Don’t pre-pay loan using your emergency buffer.

Don’t skip insurance simply to save monthly money.

Avoid high?interest loans in future (personal or credit).

16. Gradual Progress after EMI Period
After 6–7 years into loan:

Surplus capacity will improve.

Additional investments into equity/hybrid can resume.

Emergency fund will be in place.

Prepayments and planning will support retirement path

17. Path to Retirement Savings
You aim to buy a home and repay in 10–11 years.
Post-EMI, you can redirect EMIs to investment.
Your job is secure; this saves stress.

But consider:

Retirement at ~60 maybe now 10 years more away

Your existing MF + NPS + new investments will build corpus.

Goal clarity and consistent saving will lead to comfortable future.

Final Insights
Reduce EMI stress by selling only Rs. 10 lakh gold.

Choose 15-year loan with manageable EMI (~ Rs. 67,000).

Build emergency savings before loan start.

Restructure wife’s gold plan to free small surplus.

Revamp monthly savings into equity, hybrid, debt categories.

Maintain NPS, start child education fund separately.

Add term insurance to safeguard family.

Review and rebalance timely with CFP guidance.

Your plan is strong with secured job.
With measured changes, your dream home can be achieved without stress.
Your family's financial future will remain secure and flexible.

Best Regards,
K.?Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment