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: Hello;

Sell any gold which you may have and repay the loan. Once the loan burden is over you can buy gold again later.

Check if you can port the loan to another lender with lesser rate of interest.

Borrow from your close relatives/employer, if possible, to get you over the loan and repay it later.

If the recovery agents are harassing you beyond due follow-up then report it to the Police/RBI.

Please be firm and positive to get over this difficult phase.

However if you feel depressed kindly consult a psychiatrist.

Best wishes;

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: Hi,

It is natural to fear advancement in technology but that should not turn into sleepless nights. Rather use this opportunity to learn the same and upskill yourself in that field.
However, let me try to guide you with the correct steps for you to take:

1. Your total EMIs come out to be around 90k per month and fixed monthly expenses are 40k. You are left with 70k per month to invest.
2. Try and close the smaller loans of 40,000 first followed by 4 lakhs loan once your job stabilizes.

>> You have 5 lakhs in FD, 2 lakhs in savings and 2 lakhs in debt mutual funds - total liquid is 9 lakhs.
This can be your emergency fund in case of job loss and will keep your emi's and basic requirements on track for 7 months.
7 months is a sufficient time for you to find another upskilled job.

>> Keep the 5 lakhs of equity mutual funds and 2 lakhs of stocks as is.
In the meantime, pause your SIPs for a while, start accumulating surplus of 70k per month in savings account so as to overcome any uncertain situation.

You can resume your SIPs once your job is stable, you have upskilled yourself and are no longer in dilemma of job loss.

Let me know if you need more help.

Best Regards,
Reetika Sharma, Certified Financial Planner
https://www.instagram.com/cfpreetika/