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Ramalingam Kalirajan  |4803 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 15, 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 - Jun 15, 2024Hindi

I am a divorcee living with my teenager son. I am working as a teacher in a private school. My monthly income is 40,000. My son is pursuing for correspondence degree and side by side doing part time job and earning 12,000. I don't have any savings, health insurance etc. My humble request to guide me how can we start our savings now. I also want to buy health insurance for me without any more delay. Please guide. Regards

Ans: It's a privilege to help you with your financial planning. With some thoughtful strategies and careful planning, you can establish a solid financial foundation for you and your son. Let's break it down step-by-step.

Understanding Your Current Financial Situation
You earn Rs 40,000 per month, while your son contributes Rs 12,000 from his part-time job. Together, this makes a combined monthly income of Rs 52,000. Recognising this starting point is crucial for building a robust financial plan.

Considering your situation, it's commendable that you're keen on starting savings and securing health insurance promptly. This shows foresight and responsibility, which are essential traits for successful financial planning.

Budgeting and Expense Management
First, let's address budgeting. Tracking your expenses will help you identify areas where you can cut costs and save more effectively.

List Monthly Expenses: Break down your monthly expenses into categories such as rent, utilities, groceries, transportation, and other essentials. Also, factor in any discretionary spending like dining out or entertainment.

Evaluate and Trim: Assess each expense category to see where you can make adjustments. For example, cooking at home more often can reduce food costs. Small changes can add up to significant savings over time.

Set a Savings Goal: Aim to save at least 20% of your combined income. This would amount to Rs 10,400 per month. Start by saving any amount you can and gradually increase it as you manage your expenses better.

Prioritising Health Insurance
Securing health insurance should be your immediate priority. Medical emergencies can lead to substantial financial stress without adequate coverage.

Choosing a Plan: Look for a comprehensive health insurance plan that covers major illnesses, hospitalisation, and critical care. Compare different plans and their premiums to find one that fits your budget.

Covering Both: Ensure that both you and your son are covered under the plan. Family floater plans can be a cost-effective way to provide coverage for both of you.

Building an Emergency Fund
An emergency fund is essential for handling unexpected expenses such as medical emergencies, job loss, or urgent repairs.

Initial Goal: Aim to save at least three to six months' worth of living expenses. Given your current income, this would be between Rs 1,20,000 to Rs 2,40,000.

Saving Incrementally: Start by saving a small amount each month. For example, allocate Rs 5,000 monthly towards your emergency fund until you reach your goal.

Establishing Regular Savings and Investments
Once you have a health insurance plan and an emergency fund, the next step is to begin saving and investing regularly. Given your income, you can start small and gradually increase your contributions.

Recurring Deposit (RD): A recurring deposit is a safe option to start with. You can save a fixed amount every month, which earns interest over time. This is suitable for short-term goals and offers liquidity.

Mutual Funds: Mutual funds are an effective way to grow your wealth over the long term. Choose actively managed mutual funds, as they often outperform index funds due to professional management and research.

Systematic Investment Plan (SIP): Start a SIP in mutual funds to invest a fixed amount regularly. This helps in averaging the purchase cost and reducing risk. For instance, a SIP of Rs 5,000 per month in a diversified mutual fund can be a good starting point.

Evaluating and Managing Existing Insurance Policies
If you hold any investment-cum-insurance policies like LIC or ULIPs, consider their performance and charges.

Review Policy Details: Check the return on investment, charges, and insurance coverage. Many times, these policies have high charges and low returns.

Surrender and Reinvest: If the policies are not yielding satisfactory returns, consider surrendering them. Reinvest the proceeds into more efficient instruments like mutual funds for better growth and separate term insurance for adequate coverage.

Planning for Long-term Goals
Setting long-term financial goals will provide direction and motivation to your saving and investment efforts.

Child’s Education: With your son pursuing a correspondence degree, consider his future educational aspirations. Start a dedicated investment for this goal, like a mutual fund SIP, to build a corpus over time.

Retirement Planning: Even though you may have several years until retirement, it's never too early to start. Look into retirement-focused mutual funds or pension schemes that can provide a steady income post-retirement.

Avoiding Common Pitfalls
It's important to be aware of common financial mistakes and how to avoid them.

High-interest Debt: Avoid taking on high-interest debt like personal loans or credit card debt. If you already have such debts, prioritise paying them off as soon as possible.

Investing without Knowledge: Invest only in products you understand. Take time to educate yourself about various investment options and their risks.

Over-diversification: While diversification is key to reducing risk, over-diversification can dilute returns. Choose a balanced portfolio with a mix of equity and debt based on your risk tolerance.

Seeking Professional Guidance
While self-education and disciplined saving are crucial, consulting a certified financial planner can provide personalised advice.

Professional Advice: A CFP can help you create a tailored financial plan, optimise your investments, and ensure you stay on track to meet your goals.

Regular Review: Schedule regular reviews with your financial planner to assess your progress and make necessary adjustments.

Final Insights
Your willingness to start saving and securing health insurance is a commendable step towards financial stability. By budgeting effectively, prioritising health insurance, building an emergency fund, and investing wisely, you can create a secure financial future for yourself and your son. Remember, every small step counts, and consistency is key. With careful planning and disciplined execution, you will achieve your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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  |4803 Answers  |Ask -

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

I recently started working again with a ctc of 9.4L. I am 48 years old have a house and one family car. My husband is working. My son (22) wants to do MBA (from India) in a year or to. I have no kind of insurance. I'm ready to save about 40k per month. can u suggest how I should go about this?
Ans: Financial Planning for a Family with Future Education Expenses

As you embark on your new job and plan for your family's future, it's essential to prioritize financial stability and security. Here's a suggested approach to help you manage your finances effectively:

1. Emergency Fund: Start by building an emergency fund equivalent to 6-12 months of living expenses. This fund will serve as a financial safety net in case of unexpected expenses or loss of income. Aim to save a portion of your monthly income until you reach your desired emergency fund amount.

2. Insurance Coverage: Given your current lack of insurance, consider obtaining health insurance for yourself and your family to safeguard against medical expenses. Additionally, explore options for life insurance to provide financial protection for your loved ones in the event of unforeseen circumstances. Consult with an insurance advisor to determine the appropriate coverage based on your needs and budget.

3. Education Planning: With your son planning to pursue an MBA in the near future, start setting aside funds specifically for his education expenses. Research the cost of MBA programs in India and estimate the total expenses, including tuition fees, accommodation, and other associated costs. Based on this estimation, develop a savings plan to accumulate the necessary funds by the time your son begins his MBA program.

4. Retirement Planning: As you approach your 50s, it's crucial to prioritize retirement planning to ensure financial security during your post-work years. Calculate your retirement goals based on your desired lifestyle and estimated expenses. Allocate a portion of your monthly savings towards retirement accounts such as Employee Provident Fund (EPF), Public Provident Fund (PPF), or voluntary retirement savings schemes. Consider consulting with a Certified Financial Planner (CFP) to develop a comprehensive retirement plan tailored to your needs.

5. Budgeting and Savings: Create a monthly budget to track your income and expenses accurately. Allocate a portion of your monthly income towards essential expenses, such as housing, groceries, and utilities, while setting aside a portion for savings and investments. Aim to save at least 40k per month as you mentioned, with a focus on achieving your financial goals, including emergency fund, education expenses, and retirement planning.

6. Regular Review and Adjustment: Periodically review your financial plan and make adjustments as needed based on changes in your circumstances, goals, and market conditions. Stay informed about investment opportunities and consider diversifying your investment portfolio to manage risk effectively.

By following this structured approach to financial planning, you can build a solid foundation for your family's future, including your son's education and your retirement, while ensuring financial security and peace of mind.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


..Read more


Ramalingam Kalirajan  |4803 Answers  |Ask -

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

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.

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.

..Read more


Ramalingam Kalirajan  |4803 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 23, 2024

Hi sir my age is 29 don't have any savings How to start savings one my income 900 rupees
Ans: It's commendable that you're keen to embark on your savings journey despite facing financial constraints. Let's explore practical strategies to kickstart your savings plan and build a secure financial future.

Understanding Your Financial Situation

Before diving into savings strategies, let's assess your current financial landscape and identify areas where you can optimize your resources.

Assessment of Financial Position:

At 29 years old and with an income of ?900 per month, you're at the beginning of your financial journey. It's essential to recognize your income level and prioritize prudent financial habits to lay a solid foundation for the future.

1. Budgeting Essentials:

Creating and adhering to a budget is fundamental to effective financial management, irrespective of income level.

Income Evaluation: Start by mapping out your monthly income sources, including salary, allowances, and any additional earnings.
Expense Analysis: Track your expenses meticulously to identify discretionary and non-discretionary spending categories. This will help pinpoint areas where you can cut back and redirect funds towards savings.
Prioritize Savings: Allocate a portion of your income towards savings as a non-negotiable expense. Even a modest amount can accumulate over time and contribute to your financial security.
2. Cultivating Saving Habits:

Inculcating disciplined saving habits is key to achieving your financial goals, regardless of your income level.

Start Small: Begin by setting achievable savings targets that align with your income and expenses. Even saving a nominal amount regularly can foster a habit of thriftiness and financial discipline.
Automate Savings: Explore options to automate your savings process, such as setting up recurring transfers to a designated savings account. This removes the temptation to spend and ensures consistent contributions towards your savings goals.
Track Progress: Monitor your savings progress regularly and celebrate milestones along the way. Seeing your savings grow can motivate you to stay committed to your financial objectives.
3. Exploring Income Enhancement Opportunities:

While your current income may be limited, exploring avenues to augment your earnings can bolster your savings potential.

Skill Development: Invest in acquiring new skills or enhancing existing ones that can increase your employability and earning potential. Consider online courses, vocational training programs, or freelance opportunities.
Side Hustles: Explore part-time or freelance gigs that complement your skills and interests. From freelance writing to tutoring, there are myriad opportunities to earn additional income outside of your primary job.
4. Seeking Professional Guidance:

Consider consulting with a Certified Financial Planner to devise a tailored savings strategy that aligns with your financial goals and aspirations. A financial planner can provide personalized guidance and recommendations based on your unique circumstances.


Initiating savings on a limited income may seem daunting, but with strategic planning, discipline, and perseverance, it's entirely achievable. By prioritizing budgeting, cultivating saving habits, exploring income enhancement opportunities, and seeking professional guidance, you can lay a strong foundation for a secure financial future.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,

..Read more

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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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