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Ramalingam Kalirajan |2314 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Apr 17, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - Apr 16, 2024Hindi

Sir , i am 35 yrs old earing 55k monthly , I am married and 2 son . I have no saving no sip ,my expenses are 25 k monthly so can you tell me how can I save for my child's future education .

Ans: Given your monthly income, expenses, and family responsibilities, it's essential to start saving and investing for your child's future education. Here's a simple plan to help you get started:

Budgeting and Savings:

Track Expenses: Monitor your monthly expenses to identify areas where you can reduce spending and increase savings.
Emergency Fund: Build an emergency fund equivalent to 3-6 months of expenses in a liquid and accessible form to handle unexpected expenses without tapping into your investments.
Start SIPs for Child's Education:

Investment Amount: Allocate a portion of your monthly savings towards SIPs in mutual funds to build a corpus for your child's education.
Asset Allocation: Consider a balanced allocation between equity and debt mutual funds based on your risk tolerance, time horizon, and financial goals.
Investment Duration: Start SIPs with a long-term perspective (e.g., 10-15 years) to benefit from the power of compounding and potential market growth.
Education Planning:

Calculate Future Expenses: Estimate the future cost of education for your children based on the current cost and expected inflation rate.
Investment Goal: Set a specific investment goal and target amount to achieve by the time your children reach college age.
Regular Review: Periodically review and adjust your SIPs and investment strategy to stay on track towards achieving your education savings goal.
Insurance Coverage:

Life Insurance: Ensure you have adequate life insurance coverage to provide financial security to your family in case of any unforeseen events.
Health Insurance: Invest in a comprehensive health insurance plan to cover medical expenses and ensure your family's well-being.
Recommendation:

Start Early: Begin investing as early as possible to benefit from the power of compounding and achieve your education savings goal.
Systematic Investment: Start SIPs in mutual funds to build a disciplined saving habit and accumulate wealth over time.
Financial Discipline: Maintain financial discipline, avoid unnecessary expenses, and stay committed to your investment plan to achieve your financial goals.
Consult with a financial advisor to create a personalized education savings plan tailored to your needs, helping you achieve your financial goals and secure your children's future.

Asked on - Apr 17, 2024 | Answered on Apr 17, 2024

Sir I want know this but the problem is how to start , how much invest in which sectors , how much amount sip should start , so I want to know in details about the bifurcation for each segment.

Ans: Here's a more detailed breakdown to get you started:

Step 1: Increase Savings and Track Expenses

Track expenses: Analyze your monthly spending for a few months to identify areas to cut back. Small adjustments can free up significant savings. There are many budgeting apps that can help.
Increase savings: Aim to save at least Rs. 10,000 per month. With a monthly income of Rs. 55,000 and expenses of Rs. 25,000, you have Rs. 30,000 remaining. Allocate Rs. 10,000 for savings and invest the rest wisely.
Step 2: Emergency Fund

Build an emergency fund of Rs. 75,000 to Rs. 1,65,000 (3-6 months of living expenses) in a savings account or liquid fund for unexpected situations. This prevents dipping into your child's education fund.
Step 3: SIPs in Mutual Funds

SIP amount: Start a Systematic Investment Plan (SIP) of Rs. 5,000 - Rs. 7,000 per month in a balanced mutual fund. SIPs inculcate discipline and benefit from rupee-cost averaging.
Asset allocation: A balanced mutual fund invests in both equity (stocks) and debt (bonds). This offers a balance between growth potential and stability. You can consult a financial advisor for a specific asset allocation based on your risk tolerance.
Step 4: Investment Duration

Start early: The earlier you start, the more time your money has to grow through compounding. Ideally, you should invest for at least 10-15 years for your child's education.
Step 5: Education Planning

Future education costs: Research the current cost of your desired education level (e.g., undergraduate or postgraduate degree) and factor in an inflation rate of 5-7% to estimate the future cost.
Investment goal: Based on the estimated future cost and your investment timeframe, determine the total amount you need to accumulate.
Step 6: Regular Review

Review your SIPs and investment strategy annually. Adjust the SIP amount as your income grows and investment performance dictates.
Step 7: Insurance Coverage

Life insurance: Ensure you have adequate life insurance to protect your family financially in case of your absence. Term life insurance offers pure coverage at an affordable cost.
Health insurance: A comprehensive health insurance plan safeguards your family from medical emergencies and ensures you don't have to use your savings for healthcare costs.
Additional Tips

Discipline is key: Stick to your budget and avoid impulsive spending.
Seek professional guidance: A financial advisor can help create a personalized plan considering your specific needs and risk profile.
Remember, this is a general guideline. Consulting a financial advisor can provide a more personalized roadmap to secure your children's future education.

Asked on - Apr 17, 2024 | Answered on Apr 17, 2024

Thankyou sir for your guidance.

Ans: :)

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