Hi. I am a 32 years old engineer with zero experience because of UPSC preparation. I wrote mains twice but was unable to secure a rank. Now i have a debt of around 9 lakhs and emi of around 38 k per month including credit card emi. I have saved...

Hi. I am a 32 years old engineer with zero experience because of UPSC preparation. I wrote mains twice but was unable to secure a rank. Now i have a debt of around 9 lakhs and emi of around 38 k per month including credit card emi. I have saved around 2.5 lakhs to clear some of my debt. I have credit card debt of 91 k( total emi around 10 k adding all), one personal loan of 1.5k lakh(emi 5625), cred loan of 1.2 lakh(emi 4200) and a bob personal loan of 4.5 lakh(emi 13765) . My monthly earning is around 1 lakh and still have zero saving. Suggest me better ways to reduce this emi and how to start saving so that i may start gaining confidence. Also i am a mechanical engineer with a huge gap. What should i do. May clear gate exam very easily with great rank. Plz suggest me a path. Regards

Ans: Dear Sir,

Thanks for sharing your situation in detail. Let’s break it down carefully.

Current Snapshot

Age: 32, engineer, preparing for UPSC.

Debt: ?9L total

Credit Card: ?91k, EMI ?10k

Personal Loan 1: ?1.5L, EMI ?5,625

Credit Loan: ?1.2L, EMI ?4,200

BOB Personal Loan: ?4.5L, EMI ?13,765

Savings: ?2.5L (can be used strategically)

Monthly Income: ?1L

Expenses: ~0 or low, but no savings after EMIs

Observation:

Your EMI burden (~?38k) is significant relative to income (~38%).

High-interest loans (credit cards) are draining cashflow.

Career gap may impact opportunities; need clear plan for income stability.

Step 1: Debt Reduction Strategy

Prioritize High-Interest Debt:

Credit card debt ?91k → highest interest. Use ?91k from savings to clear it fully. This will reduce EMI burden by ?10k/month.

Consolidate / Negotiate Loans:

Check if you can consolidate personal loans at lower interest rate. Many banks offer balance transfer for personal loans or credit card debt.

This may reduce EMI and interest outgo.

Use Savings Strategically:

After clearing credit card, remaining ?1.59L can go as part prepayment to highest EMI personal loan (BOB ?4.5L) → reduces principal, thus EMI/tenure.

Avoid New Debt:

Stop taking any new personal or credit loans until debt is under control.

Step 2: Cashflow & Savings

After clearing credit card:

EMI burden reduces from 38k → 28k

Income 1L → surplus ~72k for living, emergency fund, and extra debt repayment.

Create a small emergency fund: ?50k initially, keep in liquid FD or savings.

Use remaining surplus to accelerate repayment of personal loans, especially the BOB loan.

Step 3: Career & Income Plan

Engineering / GATE Path:

Mechanical engineering with gap → you can focus on GATE preparation.

With your dedication, you can aim for a top rank, which opens PSU jobs with stable income.

Backup Plan:

If GATE does not yield desired result, consider private sector mechanical engineering jobs, even if experience gap exists. Freelancing or contract work is also an option.

UPSC Preparation:

Decide whether to continue UPSC preparation full-time or switch focus. Too much gap in engineering experience can reduce employability in core jobs.

Step 4: Financial Discipline

Keep a strict budget, post debt prepayment.

Avoid high-interest debt in future.

Once EMI burden reduces, start small SIPs for wealth creation even ?2–3k/month.

Track progress monthly → this will restore confidence.

Summary / Recommendation:

Clear credit card debt first from savings.

Prepay highest EMI personal loan partially to reduce burden.

word of caution pls avoid settlement of any laons at this time , it will affect your score and reduce the scope of availing loans further

Explore loan consolidation for lower interest.

Build emergency fund ~?50k.

Focus on career path: GATE preparation seems promising.

Once cashflow improves, start small SIPs → regain financial confidence.

Best regards,
Naveenn Kummar, BE, MBA, QPFP
Chief Financial Planner | AMFI Registered MFD
https://members.networkfp.com/member/naveenkumarreddy-vadula-chennai

Ans: You are 29, young and hard-working. You have responsibilities and debt pressure. Still, you are committed. That is a strength. Wanting financial freedom and planning for your son shows maturity. You can achieve both goals. But it needs proper structure, action, and discipline.

Let’s break down your current financial position and build a 360-degree solution.

Understanding Your Current Financial Picture
Your salary is Rs. 92,000 per month.

Your home loan EMI is Rs. 52,000 per month.

Personal loan EMI is Rs. 21,000 per month.

Society maintenance is Rs. 5,000 per month.

LIC premium is Rs. 5,000 per quarter (Rs. 1,667 per month approx).

You also have Rs. 2 lakh saved in a ULIP.

A bonus of Rs. 1.5 lakh is expected next month.

You recently became a father. That’s a big milestone. Congratulations on that.

But your monthly outflow is already more than Rs. 79,000. That leaves you very tight.

No room is left for basic needs, emergencies, savings or future planning.

Let us now analyse all areas step by step.

Analysing Your EMI Burden
Your EMIs (home + personal loan) are Rs. 73,000 monthly.

That is 79% of your salary. It is extremely high.

Ideally, EMI should be under 40% of your salary.

This is why you are struggling with basic expenses.

You are in a debt trap cycle. But it can be solved.

You cannot continue this structure for the next 4–12 years.

Debt reduction must be your number one focus now.

Personal loan must be cleared first. It has higher interest.

You must prepare an exit plan from this high EMI cycle.

Let’s now break it down with action steps.

Step-by-Step Strategy to Ease Financial Stress
You have two loans — home and personal.

Home loan: Rs. 46 lakh. 12-year term. EMI Rs. 52,000

Personal loan: Rs. 7 lakh. 4-year term. EMI Rs. 21,000

Bonus arriving: Rs. 1.5 lakh

Use 100% of your bonus to part-pay personal loan.

That will reduce either EMI or tenure of personal loan.

Ask bank to reduce EMI, not the tenure.

Lower EMI gives more monthly cash flow.

Do not spend bonus on anything else.

Next, stop LIC policy immediately.

LIC gives poor returns and locks your money.

If this LIC is an investment plan, then surrender it now.

Use surrender value to further pay your personal loan.

This gives you quicker cash flow relief.

Then, stop any fresh investment in ULIP.

ULIP is also an investment-insurance mix. Returns are poor.

ULIPs lock your money and give low growth.

Avoid ULIP for future. You already have Rs. 2 lakh in it.

Do not withdraw now. Let it continue till lock-in ends.

After that, redeem and reinvest in mutual funds.

That gives better growth for child and retirement.

Building a Simple, Survival Monthly Budget
Let’s say your EMI drops after bonus and LIC surrender.

Assume EMI now becomes Rs. 65,000 in total.

Now you will save Rs. 8,000–10,000 per month.

You must then follow a basic priority-based budget.

Divide into 4 buckets — Needs, EMIs, Safety, Growth.

Needs (food, child, transport): Rs. 10,000

EMIs: Rs. 65,000

Safety (emergency + term cover): Rs. 5,000

Growth (long-term): Rs. 10,000

Use this structure and never cross limits.

No luxury, no splurging, no credit card EMIs.

Be very frugal for next 3–5 years.

It will free you for life.

Your Child's Financial Security Plan
Your son is newborn now. Time is your friend.

You must start a goal-based fund for his education.

Once your personal loan is cleared, start investing monthly.

Use regular plan mutual funds with Certified Financial Planner’s help.

Avoid direct funds. They lack review and guidance.

Parents using direct funds often make emotional mistakes.

Regular plans help you choose better, stay disciplined, and switch on time.

Do not use ULIPs or LIC policies for child planning.

They give low growth, low liquidity, and poor flexibility.

Use SIP in well-diversified mutual funds instead.

Start with just Rs. 3,000 SIP after clearing loans.

Even that can grow well in 15–18 years.

Tag it for higher education. Keep it only for child.

Also, create a minor bank account in his name.

Update nomination and start documenting child’s future fund goal.

As income grows, keep increasing SIP amount.

Teach child the importance of savings early.

You are building a legacy with every small step.

Emergency Protection Plan
You have no emergency fund now. That is risky.

What if salary delays or job loss happens suddenly?

Once EMI drops, start saving Rs. 3,000–4,000 monthly.

Keep it in liquid mutual fund or high-interest savings account.

Build minimum 3 months’ expenses in that fund.

Do not touch it for any other use.

Also, take term insurance for at least 15x your annual salary.

That protects your wife and child if something happens to you.

Cancel LIC after term plan is taken.

Keep HRA, PF, and other benefits updated with nominee name.

Update your will or create one.

Write child’s future needs clearly.

Secure every angle of your life now.

Step-by-Step Loan Repayment Strategy
Use bonus to part pay personal loan now

Surrender LIC, use that money to reduce personal loan

Stop ULIP payment. Let it sit quietly till lock-in ends

Reduce monthly personal loan EMI by speaking to lender

Target to close personal loan in 18 months if possible

After that, use Rs. 21,000 freed EMI to part-pay home loan

You will close home loan 4–5 years earlier by doing this

That will free your future completely and reduce pressure

Keep one EMI-free month as buffer each year

Celebrate loan closure by increasing SIP, not shopping

That’s how real freedom begins

Smart Investment Planning (Post Debt Phase)
After your loans reduce, start investing regularly.

Follow this priority structure:

Emergency fund → SIP for child → SIP for retirement

Use only regular plan mutual funds with a Certified Financial Planner.

Avoid direct funds. They confuse and mislead investors.

Avoid sector funds, ULIPs, or complex plans.

Choose simple diversified equity mutual funds and good debt funds.

Mix of growth and safety is important.

Invest monthly and increase each year as salary rises.

Start small. Stay steady. That’s how wealth grows.

Tax Planning Tips
Once salary improves, use tax planning options wisely.

Use ELSS (in regular plan only) for Rs. 1.5 lakh limit.

Use PPF and term plan for extra benefit.

Avoid insurance-based tax saving plans.

They block money and give poor growth.

Submit investment proof on time every year.

Take help from your Certified Financial Planner to do it right.

Tax saving must also support your goals.

Final Insights
You are in a tight situation. But you are not alone.

Many face such a phase in life. Your mindset is your biggest asset now.

Your priorities are clear. You want freedom, not luxury.

Follow the above plan step-by-step for 3–5 years.

You will become debt-free and peaceful.

Your son will thank you later.

Every rupee saved now brings future stability.

Every small investment becomes a strong pillar.

Live simple now. Plan smartly. Grow steadily.

Get support from a Certified Financial Planner.

You need expert hands now. It makes all the difference.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: You have built a strong base. You have raised your sons well. They live independently. You and your wife now want a peaceful and enjoyable retired life. You have created wealth with discipline. You have no home loan. You live in your own house. This gives strength to your cash flow. Your savings across equity, mutual funds, and bank deposits show good clarity. I appreciate your careful preparation. You deserve a happy retired life with travel and comfort.

» Your Present Position
Your current financial position looks very steady. You hold direct equity of around Rs 2.5 Cr. You hold equity mutual funds worth Rs 50 lakh. You also have Rs 50 lakh in bank deposits and other secured savings. Your two rental properties add more comfort. You earn around Rs 40,000 per month from rent. You also live in your owned house in Delhi NCR. So you have no rent expense.

Your total net worth crosses Rs 5.5 Cr easily. This gives you a strong base for your retired life. You plan to spend around Rs 24 lakh per year for all expenses, including travel. This is reasonable for your lifestyle. Your savings can support this if planned well. You have built more than the minimum needed for a comfortable retired life.

» Your Key Strengths
You already enjoy many strengths. These strengths hold your plan together.

You have zero housing loan.

You have stable rental income.

You have children living independently.

You have a balanced mix of assets.

You have built wealth with discipline.

You have clear goals for travel and lifestyle.

You have strong liquidity with Rs 50 lakh in bank and secured savings.

These strengths reduce risk. They support a smooth retired life with less stress. They also help you handle inflation and medical costs better.

» Your Cash Flow Needs
Your yearly expense is around Rs 24 lakh. This includes travel, which is your main dream for retired life. A couple at your stage can keep this lifestyle if the cash flow is planned well. You need cash flow clarity for the next 30 years. Retirement at 56 can extend for three decades. So your wealth must support you for a long period.

Your rental income gives you around Rs 4.8 lakh per year. This covers almost 20% of your yearly spending. This reduces pressure on your investments. The rest can come from a planned withdrawal strategy from your financial assets.

You also have Rs 50 lakh in bank deposits. This acts as liquidity buffer. You can use this buffer for short-term and medium-term needs. You also have equity exposure. This can support long-term growth.

» Risk Capacity and Risk Need
Your risk capacity is moderate to high. This is because:

You own your home.

You have rental income.

Your children are financially independent.

You have large accumulated assets.

You have enough liquidity in bank deposits.

Your risk need is also moderate. You need growth because inflation will rise. Travel costs will rise. Medical costs will increase. Your lifestyle will change with age. Your equity portion helps you beat inflation. But your equity exposure must be managed well. You should avoid sudden large withdrawals from equity at the wrong time.

Your stability allows you to keep some portion in equity even during retired life. But you should avoid excessive risk through direct equity. Direct equity carries concentration risk. A balanced mix of high-quality mutual funds is safer in retired life.

» Direct Equity Risk in Retired Life
You hold around Rs 2.5 Cr in direct equity. This brings some concerns. Direct equity needs frequent tracking. It needs research. It carries single-stock risk. One mistake may reduce your capital. In retired life, you need stability, clarity, and lower volatility.

Direct funds inside mutual funds also bring challenges. Direct funds lack personalised support. Regular plans through a Mutual Fund Distributor with a Certified Financial Planner bring guidance and strategy. Regular funds also support better tracking and behaviour management in volatile markets. In retired life, proper handholding improves long-term stability.

Many people think direct funds save cost. But the value of advisory support through a CFP gives higher net gains over long periods. Direct plans also create more confusion in asset allocation for retirees.

» Mutual Funds as a Core Support
Actively managed mutual funds remain a strong pillar. They bring professional management and risk controls. They handle market cycles better than index funds. Index funds follow the market blindly. They do not help in volatile phases. They also offer no risk protection. They cannot manage quality of stocks.

Actively managed funds deliver better selection and risk handling. A retiree benefits from such active strategy. You should avoid index funds for a long retirement plan. You should prefer strong active funds under a disciplined review with a CFP-led MFD support.

» Why Regular Plans Work Better for Retirees
Direct plans give no guidance. Retired investors often face emotional decisions. Some panic during market fall. Some withdraw heavily during market rise. This harms wealth. Regular plan under a CFP-led MFD gives a relationship. It offers disciplined rebalancing. It improves long-term returns. It protects wealth from poor behaviour.

For retirees, the difference is huge. So shifting to regular plans for the mutual fund portion will help long-term stability.

» Your Withdrawal Strategy
A planned withdrawal strategy is key for your case. You should create three layers.

Short-Term Bucket
This comes from your bank deposits. This should hold at least 18 to 24 months of expenses. You already have Rs 50 lakh. This is enough to hold your short-term cash needs. You can use this for household costs and some travel. This avoids panic selling of equity during market downturn.

Medium-Term Bucket
This bucket can stay partly in low-volatility debt funds and partly in hybrid options. This should cover your next 5 to 7 years. This helps smoothen withdrawals. It gives regular cash flow. It reduces market shocks.

Long-Term Bucket
This can stay in high-quality equity mutual funds. This bucket helps beat inflation. This bucket helps fund your travel dreams in later years. This bucket also builds buffer for medical needs.

This three-bucket strategy protects your lifestyle. It also keeps discipline and clarity.

» Handling Property and Rental Income
Your properties give Rs 40,000 monthly rental. This helps your cash flow. You should maintain the property well. You should keep some funds aside for repairs. Do not depend fully on rental growth. Rental yields remain low. But your rental income reduces pressure on your investments. So keep the rental income as a steady support, not a primary source.

You should not plan more real estate purchase. Real estate brings low returns and poor liquidity. You already own enough. Holding more can hurt flexibility in retired life.

» Planning for Medical Costs
Medical costs rise faster than inflation. You and your wife need strong health coverage. You should maintain a reliable health insurance. You should also keep a medical fund from your bank deposits. You may keep around 3 to 4 lakh per year as a buffer for medical needs. Your bank savings support this.

Health coverage reduces stress on your long-term wealth. It also avoids large withdrawals from your growth assets.

» Travel Planning
Travel is your main dream now. You can plan your travel using your short-term and medium-term buckets. You can take funds annually from your liquidity bucket. You can avoid touching long-term equity assets for travel. This approach keeps your wealth stable.

You should plan travel for the next five years with a budget. You should adjust your travel based on markets and health. Do not use entire gains of equity for travel. Keep travel budget fixed. Add small adjustments only when needed.

» Inflation and Lifestyle Stability
Inflation will impact lifestyle. At Rs 24 lakh per year today, the cost may double in 12 to 14 years. Your equity exposure helps you beat this. But you need careful rebalancing. You also need disciplined review with a CFP-led MFD. This will help you manage inflation and maintain comfort.

Your lifestyle is stable because your children live independently. So your cash flow demand stays predictable. This makes your plan sustainable.

» Longevity Risk
Retirement at 56 means you may live till 85 or 90. Your plan should cover long years. Your total net worth of around Rs 5.5 Cr to Rs 6 Cr can support this. But you need a proper drawdown strategy. Avoid high withdrawals in early years. Keep your travel budget steady.

Do not depend on one asset class. A mix of debt and equity gives comfort. Keep your bank deposits as cushion.

» Succession and Estate Planning
Since you have two sons who are settled, you can plan a clear will. Clear distribution avoids conflict. You can also assign nominees across accounts. You can also review your legal papers. This gives peace to you and your family.

» Summary of Your Retirement Readiness
Based on your assets and cash flow, you are ready to retire. You have enough wealth. You have enough liquidity. You have enough income support from rent. You also have good asset mix. With proper planning, your lifestyle is comfortable.

You can retire now. But maintain a disciplined withdrawal strategy. Shift more reliance from direct equity into professionally managed mutual funds under regular plans. Keep your liquidity strong. Review once every year with a CFP.

Your wealth can support your travel dreams for many years. You can enjoy retired life with confidence.

» Finally
Your preparation is strong. Your intentions are clear. Your lifestyle needs are reasonable. Your assets support your dreams. With a balanced plan, steady review, and mindful spending, you can enjoy a comfortable retired life with your wife. You can travel the world without fear of running out of money. You deserve this peace and joy.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

https://www.youtube.com/@HolisticInvestment