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54 Year Old With Struggling Shop & House Loan - How Can I Start Saving?

Ramalingam Kalirajan |8309 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Feb 27, 2025

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 - Feb 03, 2025Hindi

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Hi , Am 54 years old nothing for saving ,i have a shop of ladies garments not running well which is probably worth 85lacs and a house loan of 38lacs for which am paying 38000emi,am running a cafe which i started just couple of months back .So i please advice how i can start saving.

Ans: Assessing Your Financial Situation
You are 54 years old and have no savings.
You own a ladies' garment shop worth Rs 85 lakhs, but it is not running well.
You have a home loan of Rs 38 lakhs with an EMI of Rs 38,000.
You have recently started a café, which is still in the early stage.
Your financial situation needs immediate action. You must secure stable cash flow, reduce liabilities, and build savings.

Immediate Steps to Improve Financial Stability
1. Focus on Business Cash Flow
The café is new, and initial months are challenging. Track daily sales and expenses.
Understand which items sell more and promote them.
Reduce unnecessary costs. Rent, salaries, and inventory should be controlled.
Explore digital marketing, online delivery, and social media to attract more customers.
Offer discounts or loyalty programs to increase footfall.
Your garment shop is not doing well. Consider selling it if it is a burden. If you can revive it, identify what is missing. Check market trends, customer needs, and competitors.

If neither business is profitable, look for other income sources. Consulting, part-time jobs, or online businesses could help.

2. Manage Your Home Loan Smartly
Your EMI is Rs 38,000, which is a significant expense.
If possible, transfer the loan to a lower interest rate bank. It will reduce EMI.
Use any extra earnings to prepay the loan. Lower loan means less interest burden.
If the financial burden is too high, consider selling the house and moving to a more affordable place.
Clearing the home loan early will free up money for savings and investments.

3. Start Saving Even with Small Amounts
Open a separate bank account for savings. Treat it as an expense, not an option.
Even Rs 5,000 per month is a good start. Increase as income grows.
Keep 3-6 months of expenses in an emergency fund. A fixed deposit or liquid fund is a good choice.
Avoid spending on non-essential items. Reduce lifestyle expenses temporarily.
Building Wealth for the Future
1. Smart Investment Plan
Once savings are stable, start investing.
Mutual funds through a Systematic Investment Plan (SIP) are ideal for long-term growth.
Select a mix of large, mid, and small-cap funds based on risk capacity.
Fixed deposits can be considered for short-term safety.
Avoid investment-cum-insurance products. They give low returns.
Since you are already 54, choose investment options that grow wealth steadily but do not carry high risks.

2. Retirement Planning
Your business may not generate steady income forever. Retirement savings are important.
Build a separate retirement corpus through mutual funds and fixed-income investments.
Invest at least 20% of your income for retirement.
If the café stabilizes, increase retirement contributions.
Expense Control and Tax Planning
Track every expense. Use mobile apps or maintain a diary.
Reduce unnecessary spending. Dining out, entertainment, and luxury purchases should be limited.
Plan your taxes smartly. Use deductions available under income tax laws.
Investing in tax-saving mutual funds or pension schemes can reduce tax burden.
Finally
You need to secure cash flow, manage loans, and build savings. Focus on increasing income from your café while controlling expenses. Even small savings will add up over time.

Start investing early to secure your retirement. Take disciplined financial actions today to build a stress-free future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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