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How can a 40-year-old parent with a low income and three young children save more money?

Ramalingam

Ramalingam Kalirajan  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 23, 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
SACH Question by SACH on Jun 30, 2024Hindi
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I am 40 ye old with monthly salary of 15000. I have 3 children all below 9 yrs.I hardly save 1000 per month.What I can do at this stage?

Ans: You are 40 years old with a monthly salary of Rs. 15,000. With three young children and minimal savings of Rs. 1,000 per month, your financial situation is challenging but not impossible to improve.

Immediate Steps to Improve Savings
Budgeting: Begin with a detailed budget. Track every rupee you spend. Identify areas where you can cut back. Even small savings can accumulate over time.

Prioritize Needs Over Wants: Focus on essential expenses like food, housing, and education. Delay or avoid non-essential purchases.

Reduce Debt: If you have any high-interest debts, prioritize paying them off. This will free up money for savings.

Building an Emergency Fund
Small but Consistent Savings: Even with Rs. 1,000 a month, start building an emergency fund. This fund will be a financial cushion for unexpected expenses.

Automate Savings: Set up an automatic transfer of Rs. 1,000 into a savings account each month. This ensures you save before spending.

Financial Planning for Children
Educational Savings: Education is a significant future expense. Explore government schemes like Sukanya Samriddhi Yojana if you have daughters, or Public Provident Fund (PPF) for general savings. These offer safe, long-term growth with tax benefits.

Scholarship Opportunities: Encourage your children to excel academically. Research scholarships that can ease the financial burden of their education.

Increasing Income Opportunities
Supplemental Income: Explore opportunities to increase your income. Consider part-time work, freelancing, or starting a small side business based on your skills.

Skill Development: Invest in affordable skill development courses. Improving your skills can lead to better job opportunities and higher income.

Long-Term Financial Planning
Life Insurance: Protect your family by getting a term insurance policy. This is essential to ensure your children’s financial security in case of any unforeseen events.

Health Insurance: Ensure you have basic health insurance coverage. Medical expenses can drain savings quickly, so insurance is crucial.

Start Small Investments: Once your emergency fund and basic insurance are in place, consider small investments. SIPs in mutual funds, even with a small amount, can grow over time. Consult with a Certified Financial Planner to choose the right options.

Final Insights
Your current financial situation is challenging, but with careful planning and discipline, you can improve it. Focus on increasing your savings, securing insurance, and exploring additional income opportunities. Every small step will contribute to a better financial future for you and your children.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam Kalirajan  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 15, 2024

Asked by Anonymous - Apr 15, 2024Hindi
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Sir am 33 year old.. current taking salary of 75k net per month..and having car loan of 14 k and SIP of 8.5 k .need to save for child future,please suggest
Ans: Here are some suggestions on how you can save for your child's future with a monthly income of ?75,000, a car loan of ?14,000, and an existing SIP of ?8,500:

Analyze your current spending:

Track your expenses for a month to understand where your money goes. This will help you identify areas where you can cut back and free up additional savings for your child.
Revisit your car loan:

If possible, consider refinancing your car loan to a lower interest rate. This can free up some money each month that you can then redirect towards your child's savings.
Optimize your SIP:

Review your existing SIP and ensure it aligns with your child's future goals and your risk tolerance. You may want to consider increasing the SIP amount if there's room in your budget after accounting for other expenses.
Prioritize Child Savings:

Once you have a better understanding of your spending and have potentially reduced your car loan outgo or optimized your SIP, allocate a specific amount towards your child's savings.
Investment options for your child's future:
1. Increase Existing SIP:

Consider increasing your existing SIP in the well-diversified equity mutual fund by ?3,500 per month. This brings your total SIP contribution to ?12,000 per month. This focuses on long-term growth for your child's future.
2. Diversification with Debt Fund:

Start a new SIP in a low-risk debt fund with ?3,000 per month. This provides stability and helps manage short-term financial needs your child might have. You can choose a short-term or medium-term debt fund based on your preference for when your child might need the money.
Benefits of this approach:

Flexibility: This approach allows you to manage growth and stability within your child's savings plan. The equity SIP focuses on long-term growth, while the debt SIP provides a buffer for immediate needs.
Control: You have more control over the asset allocation. You can adjust the SIP amounts in each fund as your child grows and their financial goals become clearer.
Cost-effective: Avoiding ULIPs eliminates high fees associated with those products. Regular mutual funds generally have lower expense ratios.
Additional Tips:

Review and Rebalance: Regularly review your investment strategy and rebalance the portfolio (equity vs. debt) if needed, to maintain your desired asset allocation.
Start Early, Invest Regularly: Even small increases in SIP contributions can make a significant difference over time due to compounding.
Consider PPF or Sukanya Samriddhi (if applicable): If you're in India, explore options like Public Provident Fund (PPF) or Sukanya Samriddhi Yojana (for girl child) for additional tax benefits and safe, guaranteed returns.
Remember:

Consult a financial advisor for personalized advice considering your risk tolerance and your child's age and goals.
They can recommend specific mutual funds based on your investment goals and risk profile.
By following these steps and consulting a professional, you can build a strong foundation for your child's financial future.

..Read more

Ramalingam

Ramalingam Kalirajan  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 2024

Asked by Anonymous - Jul 19, 2024Hindi
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Hi, I am 44 Years, Married, Wife age 39 and not working, 2 Kids age 10 and 6 years studying. Monthly In : approx.150000 (after deducting tax etc.). Monthly expenses approx. Rs. 1 Lac, Investment: Rs. 17500 PM in 7 different MFs, 12500 PPF PM, 50000 Insurance Per annum, 50000 NPS per annum, Not having own house (suffered a loss of approx. Rs. 25 Lac in a property in year 2015), currently on rent, not having any other support system...pl advise how to proceed further. Regards
Ans: Current Financial Overview
Your income is Rs. 1,50,000 per month.

Your monthly expenses are approximately Rs. 1,00,000.

You are investing Rs. 17,500 per month in mutual funds, Rs. 12,500 per month in PPF, Rs. 50,000 annually in insurance, and Rs. 50,000 annually in NPS.

Assessing Your Investments
Mutual Funds

Investing in seven different mutual funds is good for diversification.

PPF

PPF is a safe investment with tax benefits.

Insurance

Ensure you have adequate term insurance coverage.

NPS

NPS is good for retirement planning with tax benefits.

Financial Goals and Strategies
Goal: Buying a House
You previously faced a loss in property investment.

Saving for a house should be a priority.

Consider saving separately in a high-interest account.

Goal: Children’s Education
Plan for your children’s education expenses.

Start SIPs in education-focused mutual funds.

Goal: Retirement Planning
You are already investing in NPS and PPF.

Consider increasing contributions to NPS.

Monthly Savings Allocation
Increase Savings

Try to save more from your monthly income.

Aim for saving 25-30% of your income.

Investment Diversification
Equity Mutual Funds

Allocate more to large-cap and mid-cap funds.

These funds offer balanced growth and stability.

Debt Funds

Invest in debt funds for stability and regular income.

Balanced Funds

Consider balanced advantage funds.

These funds provide a mix of equity and debt.

Insurance Review
Term Insurance

Ensure you have adequate term insurance coverage.

A cover of Rs. 1 crore is recommended.

Health Insurance

Ensure comprehensive health coverage for your family.

Emergency Fund
Maintain an emergency fund.

Keep at least 6 months of expenses in a liquid fund.

Professional Guidance
Consult a Certified Financial Planner.

They can provide personalized advice and regular reviews.

Action Plan
1. Increase SIPs

Gradually increase SIP contributions.

Focus on large-cap, mid-cap, and balanced funds.

2. Save for House

Save separately in a high-interest account for buying a house.

3. Plan for Education

Start SIPs in education-focused mutual funds.

4. Review Insurance

Ensure adequate term and health insurance coverage.

5. Maintain Emergency Fund

Keep an emergency fund for at least 6 months of expenses.

Final Insights
Your financial plan should focus on increasing savings, diversifying investments, and planning for future goals.

Regularly review and adjust your investments to stay on track.

Seek professional guidance to ensure a comprehensive financial strategy.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 28, 2025

Asked by Anonymous - Jan 27, 2025Hindi
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My monthly income is 1.3lac No saving Monthly expences are 20k Emi 10k What to do for furture to make big saving I am 32yrs old
Ans: At 32 years, earning Rs. 1.3 lakh monthly is commendable. Your expenses and EMI are under control, leaving substantial surplus income for savings and investments. This is the right time to set long-term financial goals and take strategic actions to secure your financial future.

Current Financial Snapshot
Monthly Income: Rs. 1.3 lakh

Monthly Expenses: Rs. 20,000

EMI: Rs. 10,000

Surplus Income: Rs. 1 lakh

Current Savings: None

Immediate Financial Goals
1. Create an Emergency Fund:

Save at least six months' worth of expenses, including EMIs.

Use a high-liquidity account or fixed deposit for this fund.

2. Review Loan Repayment:

Clear your current EMI loan as soon as possible.

Avoid taking any additional loans for the next few years.

3. Track and Optimise Expenses:

Review your expenses for any unnecessary spending.

Allocate a fixed amount towards savings and investments.

Long-Term Financial Goals
1. Retirement Planning:

Start planning for retirement early to benefit from compounding.

Allocate a portion of savings to equity mutual funds for long-term growth.

2. Wealth Creation:

Invest regularly through SIPs in actively managed mutual funds.

Diversify into large-cap, mid-cap, and small-cap mutual funds.

3. Tax Planning:

Invest in tax-saving instruments under Section 80C and 80D.

Focus on equity-linked options for better post-tax returns.

Building a Savings Plan
1. Automate Savings:

Set up automatic transfers to savings and investment accounts.

Begin with 50% of your surplus income (Rs. 50,000 per month).

2. Diversify Investments:

Allocate funds to mutual funds, fixed-income instruments, and gold.

Actively managed mutual funds outperform index funds in volatile markets.

3. Avoid Direct Funds:

Direct funds lack professional guidance and regular review.

Regular funds through a Certified Financial Planner ensure better portfolio management.

Investment Strategies
1. Mutual Funds:

SIPs offer disciplined investing and long-term wealth creation.

Actively managed funds provide higher growth than index funds.

2. Debt Instruments:

Include debt mutual funds for stability and diversification.

Debt funds are tax-efficient but taxed as per your income slab.

3. Insurance Coverage:

Take adequate health insurance to cover medical emergencies.

If you have dependents, purchase term life insurance for their financial security.

Tax Implications
1. Mutual Fund Gains:

Equity mutual fund gains above Rs. 1.25 lakh are taxed at 12.5%.

Debt mutual fund gains are taxed as per your income slab.

2. Section 80C Benefits:

Invest in ELSS or PPF for tax-saving benefits.

Consider a balanced mix of tax-saving and growth-focused instruments.

Financial Discipline
1. Set Clear Goals:

Define your short-term and long-term financial goals.

Align savings and investments to these goals.

2. Track Progress:

Regularly review your income, expenses, and investments.

Make adjustments based on life changes or market conditions.

3. Avoid Impulsive Spending:

Stick to your budget and avoid lifestyle inflation.

Prioritise savings over non-essential purchases.

Final Insights
You are in an excellent position to build wealth with disciplined financial planning. Focus on clearing your loan quickly and creating an emergency fund. Begin investing in mutual funds through SIPs and diversify across asset classes. Work with a Certified Financial Planner to create a tailored investment strategy. By staying consistent, you can achieve your financial goals and secure a prosperous future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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Latest Questions
Ramalingam

Ramalingam Kalirajan  |7838 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 05, 2025

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Hello Sir, this is Dhiraj DM, I am 48 year's old married with no kids, we have any flat worth 1. 5 cr given on rent around 50 lakhs of equity 20 lacs mutual funds we want to retire in next 3 years,please guide. We live in a metro no liability, we r into Gifting business now want to retire in next 3 years
Ans: Your retirement is just three years away. You have built a strong foundation with real estate, equity, and mutual funds. Now, the goal is to structure your investments for steady income, security, and long-term sustainability.

1. Assessing Your Current Financial Position
Flat Worth Rs. 1.5 Crore: This generates rental income, but liquidity is limited.
Equity Portfolio of Rs. 50 Lakh: Market-linked investments with potential for high returns but volatile.
Mutual Funds of Rs. 20 Lakh: Offers diversification and moderate risk exposure.
No Liabilities: This is a strong advantage for financial freedom.
Gifting Business: If planning to exit, ensure business-related finances are sorted before retirement.
2. Estimating Post-Retirement Income Needs
Calculate expected monthly expenses, including medical, travel, lifestyle, and emergency costs.
Factor in inflation, as expenses will rise over time.
Consider long-term costs such as medical care and home maintenance.
3. Structuring Retirement Income
Rental Income as a Fixed Source
Your flat generates rental income, which helps with stability.
Consider reinvesting this income for further growth.
Portfolio Rebalancing for Stability
Equity exposure is beneficial but risky close to retirement.
Shift some funds to low-risk instruments for safety.
Keep some allocation to equity to combat inflation.
Maintaining Liquidity for Emergencies
Create an emergency fund of at least 2 years' expenses in liquid assets.
Avoid relying solely on investments that require selling in volatile markets.
4. Health and Insurance Planning
Ensure comprehensive health insurance for both of you, at least Rs. 15-20 lakh coverage.
If you hold any old insurance policies with low returns, consider restructuring them.
Create a separate healthcare fund for long-term medical expenses.
5. Tax Efficiency in Retirement
Structure withdrawals smartly to reduce tax burden on capital gains.
Use tax-free instruments where applicable.
Rental income is taxable, so deduct maintenance expenses to lower tax outgo.
6. Planning Investments for Retirement Income
Avoid complete reliance on fixed-income instruments, as they may not beat inflation.
A mix of mutual funds, debt instruments, and systematic withdrawal plans (SWP) will ensure steady cash flow.
Keep some investments growth-oriented to sustain wealth over decades.
7. Estate and Legacy Planning
Prepare a clear will to ensure smooth asset transfer.
If you plan to donate or support causes, structure funds accordingly.
Finally
Ensure liquidity and stability in your investments.
Reduce risk in equity but keep exposure for growth.
Maintain a dedicated healthcare fund and strong insurance coverage.
Structure investments to minimise taxes and ensure steady income.
Plan legacy and succession to avoid future complications.
Would you like a detailed plan on how to allocate your investments for steady retirement income?

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

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

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Yoga, Mindfulness Expert - Answered on Feb 05, 2025

Asked by Anonymous - Feb 04, 2025Hindi
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My sister is recently diagnosed with second stage of breast cancer. She is always emotional and moody. Can I introduce her to yoga or meditation? Can yoga help her cope with the fear and uncertainty?
Ans: I'm very sorry to hear about your sister’s diagnosis. This is a challenging time, and emotional support is just as important as medical treatment. Yes, yoga and meditation can help her cope with fear, stress, and uncertainty by bringing mental peace, emotional strength, and relaxation.

How Yoga Can Help:
Reduces Anxiety & Fear: Gentle yoga and deep breathing activate the parasympathetic nervous system, which helps in relaxation and emotional balance.
Improves Sleep: Many cancer patients struggle with sleep. Yoga Nidra and slow breathing exercises can promote restful sleep.
Boosts Positivity: Meditation and mindfulness help shift focus from fear to inner peace.
Strengthens the Body: Light yoga can help reduce fatigue and improve overall well-being during treatment.
Recommended Practices for Your Sister:
Breathing (Pranayama): Anulom Vilom (Alternate Nostril Breathing) and Bhramari (Humming Bee Breath) calm the mind.
Gentle Yoga Poses: Child’s Pose, Butterfly Pose, and Legs-Up-The-Wall Pose promote relaxation.
Meditation & Yoga Nidra: Guided meditation can help ease emotional distress and bring hope.
Encourage her to consult a yoga coach for personalized support. With the right guidance, yoga can become a healing companion in her journey.

R. Pushpa, M.Sc (Yoga)
Online Yoga & Meditation Coach
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https://www.instagram.com/pushpa_radiantyogavibes/

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Pushpa R  |49 Answers  |Ask -

Yoga, Mindfulness Expert - Answered on Feb 05, 2025

Asked by Anonymous - Feb 04, 2025Hindi
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Health
Mam, can yoga help prevent cancer in women? Please advice
Ans: Yoga cannot guarantee the prevention of cancer, but it can play a supportive role in maintaining overall health, reducing risk factors, and improving well-being. Many studies suggest that regular yoga practice helps reduce stress, improve immunity, balance hormones, and promote detoxification—all of which may lower the risk of cancer in women.

How Yoga Can Help:
Reduces Stress: Chronic stress weakens the immune system and increases inflammation, which can contribute to disease. Practicing meditation, breathing exercises, and relaxation techniques keeps the body in balance.
Boosts Immunity: Gentle yoga poses improve blood circulation and support the lymphatic system, which helps remove toxins from the body.
Balances Hormones: Hormonal imbalances may increase the risk of conditions like breast and ovarian cancer. Regular yoga helps maintain a healthy endocrine system.
Supports Detoxification: Twisting poses and deep breathing help the body eliminate waste and toxins.
Recommended Practices:
Pranayama (Breathwork): Anulom Vilom and Bhramari help calm the nervous system.
Yoga Poses: Cobra Pose, Twists, and Forward Bends improve digestion and circulation.
Meditation & Relaxation: Yoga Nidra and mindfulness reduce stress and promote healing.
For personalized guidance, consult a yoga coach who can create a practice suited to your health needs.

R. Pushpa, M.Sc (Yoga)
Online Yoga & Meditation Coach
Radiant YogaVibes
https://www.instagram.com/pushpa_radiantyogavibes/

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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