How to Budget My 67,000 INR Salary with Existing Loans and Investments?

Ans: At 36 years old and serving in a PSU, you have a solid financial foundation. Your monthly gross salary of Rs 1.6 lakh and various investments show your commitment to securing your future. Let's assess your current situation and see if it’s sufficient for your future needs.

Existing Investments
PPF Contributions:

Rs 1.5 lakh in your PPF.
Rs 1.5 lakh in your wife’s PPF.
These provide long-term tax-free returns.
Sukanya Samriddhi Yojana (SSY):

Rs 1.5 lakh annually for your daughter.
You have planned an FD, RD, and SIP to fund this.
LIC Policies:

Policies with a sum assured of Rs 12 lakh.
Monthly premium of Rs 10,500.
Term Insurance and Mediclaim:

Adequate term insurance from your employer.
Comprehensive health insurance cover for the family.
National Pension System (NPS):

Monthly contribution of Rs 29,000 (including employer’s contribution).
This will help build a substantial corpus for retirement.
Financial Goals and Assessment
Children’s Education:

Ensure you have planned for your children’s higher education.
Costs can be substantial, and early planning helps.
Retirement Planning:

Your NPS contributions are a good start.
Consider additional investments for a comfortable retirement.
Emergency Fund:

Maintain an emergency fund for unforeseen expenses.
Typically, this should cover 6-12 months of expenses.
Recommendations
Review and Adjust Insurance:

Evaluate your LIC policies. They might offer low returns.
Consider investing in mutual funds for higher returns.
Increase Equity Exposure:

SIP in mutual funds offers better long-term returns.
Avoid index funds; opt for actively managed funds for higher growth.
Education Fund for Kids:

Start a dedicated fund for your children’s education.
Equity mutual funds can help grow this corpus.
Regular Financial Review:

Periodically review your financial plan.
Adjust based on life changes and financial goals.
Consult a Certified Financial Planner:

A CFP can provide tailored advice.
They help optimize your investments and ensure you meet your financial goals.
Insight into Insurance Policies
Life Insurance:

Your LIC policies might not be the best investment.
Consider surrendering and reinvesting in mutual funds for better returns.
Term Insurance:

Ensure your term insurance cover is adequate.
This protects your family in case of any unfortunate event.
Benefits of Professional Guidance
Certified Financial Planner (CFP):
A CFP can help balance your portfolio.
They provide insights into better investment options and tax-saving strategies.
Final Insights
Diversify Investments:

Diversify across different asset classes.
Balance between equity, debt, and insurance.
Focus on Long-term Goals:

Plan for your retirement and children’s education.
Regularly review and adjust your financial plan.
Seek Professional Advice:

A Certified Financial Planner can offer a 360-degree solution.
They ensure your investments are aligned with your long-term goals.
Summary
Your current investments are solid.
Review and adjust your insurance policies.
Increase equity exposure for better long-term returns.
Consult a Certified Financial Planner for tailored advice.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: You are in a better financial position than most.
No debt. Strong salary. Sensible savings.
That’s a great base to build on.

You’ve made mature choices by avoiding unnecessary EMI burdens.
Also, giving priority to secure instruments shows responsibility towards your family.

Now let’s assess every part of your strategy —
To ensure you are future-ready and financially confident.

? Salary and Cash Flow Clarity

– You earn Rs. 2.2 lakhs salary each month.
– Rent of Rs. 20,000 adds to that.
– Total income is Rs. 2.4 lakhs per month.
– Household expenses are around Rs. 60,000.
– Insurance premiums cost Rs. 10,000 monthly.
– This leaves you with Rs. 1.7 lakhs monthly surplus.

That’s a very strong monthly saving rate.
You are saving over 65% of your income.

? Strong Protection Cover

– You’ve taken term insurance of Rs. 2 Cr till age 60.
– Very important move for your family’s security.
– Health cover of Rs. 10 lakhs for your family is sufficient.
– Rs. 3 lakhs cover for parents may fall short with age.

Keep increasing this cover with super top-up.
Health inflation is very high in India.
Do not compromise on this.

? Real Assets and Purposeful Holdings

– You own two plots worth Rs. 80 lakhs.
– You are holding them for your daughter.
– It is okay as it is goal-linked.
– Do not invest further in plots or real estate.

Real estate lacks liquidity and income.
Avoid more purchases in this space.

? Consistent Investments in Safe Assets

– You’ve built Rs. 55 lakhs in FDs, PPF, NSC, and NPS Tier 2.
– Great effort and risk-averse by nature.
– This builds safety and peace of mind.
– Emergency fund seems well covered through FDs.

PPF maturity is useful for retirement.
NSC and PPF are low-yield but safe.
NPS Tier 2 gives equity exposure.

? Gold Investments – Discipline Without Commitment

– You are buying physical gold every month.
– It gives the feeling of safety and value.
– However, physical gold is not productive.
– It does not generate income or compounding.

Consider reducing physical gold buying.
Move that money to other smart instruments.
SGBs (Sovereign Gold Bonds) are better for long-term.

? LIC and SBI Insurance Policies

– LIC policy is maturing next year.
– You’ll receive Rs. 2 lakhs per year for 7 years.
– This is Rs. 14 lakhs guaranteed cash flow.
– Useful as semi-passive income till 2032.

You also hold a SBI Life plan maturing in 2030.
If this is a traditional or ULIP plan, exit it.
Surrender and redirect to mutual funds.
Traditional insurance is poor for wealth building.

You already have sufficient life cover.
There is no need to continue endowment policies.

? NPS Tier 2 – Are You Using It Right?

– You are investing in NPS Tier 2 instead of SIPs.
– Because you are unsure of job continuity.
– You don’t want SIP commitments.
– This is understandable in a volatile job market.

However, NPS Tier 2 is not a long-term vehicle.
It lacks tax benefit. It also lacks withdrawal restrictions.
You are voluntarily investing into a structure not designed for compounding.

Also, NPS Tier 2 returns depend on equity-debt allocation.
These are limited and not actively managed.
Flexibility is low. Transparency is average.

This strategy needs improvement.

? Why SIP Is Still Better Than NPS Tier 2

– SIP is not a legal or rigid commitment.
– You can stop, pause, increase, or reduce any time.
– You don’t have to commit lifelong.
– Mutual fund SIPs are highly flexible.

SIP is like brushing your teeth.
Simple habit. No paperwork to stop.

You can also start with small SIPs.
Maybe Rs. 10,000 per month.
Then increase only if job continues.

Use step-up SIPs.
That adjusts with inflation or salary hike.
Keep everything in your control.

? Avoid Direct Plans, Choose Regular Plans with CFP

– You didn’t mention whether you are using direct or regular funds.
– Avoid direct plans even if they save commission.
– You won’t get tracking, advice, review, or goal-based planning.

Investing through regular plans via a Certified Financial Planner is better.
They’ll help rebalance, restructure, and realign your funds annually.
This improves returns and manages risk.

? Avoid Index Funds – Choose Actively Managed Funds

– You didn’t mention index funds, which is good.
– Index funds are passive.
– They don’t protect downside risk.
– No fund manager oversight.

Actively managed mutual funds outperform indexes.
They also adjust to market cycles.
Especially in Indian markets, active funds deliver better risk-adjusted returns.

? What to Do With Surplus of Rs. 1.7 Lakhs

Use this in a flexible, goal-based investment format.
Here’s how you can start:

– Invest Rs. 50,000 monthly via SIPs in regular mutual funds.
– Flexi cap, large & midcap, and hybrid equity-debt funds are ideal.
– If you want safety, add short-term debt fund SIP of Rs. 10,000.
– Continue Rs. 10,000 in NPS Tier 2 if needed.
– Buy Rs. 5,000 SGB every month instead of physical gold.
– Invest Rs. 50,000 lumpsum per year in a child education fund.
– Park Rs. 20,000 monthly in liquid funds for short-term needs.

This way, you are using the full Rs. 1.7 lakhs monthly.
Every rupee will serve a purpose.

You still have Rs. 55 lakhs in safe instruments.
So you are not taking extra risk.

? Child Education and Retirement

Your daughter is in Class 9 now.
So her college expenses start in 3–4 years.

You should start a separate education corpus now.
Don’t rely on your LIC returns for education.
Inflation in education is high.

Plan at least Rs. 25–30 lakhs for her higher education.
Use SIP in a mix of hybrid and flexi-cap funds.

For retirement, your PPF, LIC inflows, plots, and new SIPs will help.
Also build Rs. 1 Cr in mutual funds over next 10 years.
This will generate monthly income in retirement.

? Continue Medical Insurance, Review Annually

You are paying Rs. 10,000 monthly for premiums.
Continue them. But review policies annually.
Check if you can merge or shift to better plans.

Also add super top-up for parents.
Healthcare costs can be sudden and high.

? Tax Efficiency and Exit Planning

You must start planning your exit strategy from now.
When to redeem mutual funds.
How to generate income.

Remember new tax rules:
– Equity mutual fund LTCG over Rs. 1.25 lakh taxed at 12.5%.
– STCG is taxed at 20%.
– Debt fund returns taxed as per your tax slab.

Work with a Certified Financial Planner to minimise tax burden.
Use SWP, staggered exits, and goal-aligned redemptions.

? Finally

You are on a strong financial foundation.
No debt. High savings. Balanced life priorities.

You are cautious and practical.
But you are under-utilising your wealth potential.

Shift more money to flexible and growth-oriented mutual funds.
Give every rupee a goal and purpose.
Avoid real estate and physical gold accumulation.

Let your wealth grow silently while you focus on your family.

You don’t need to invest more.
You only need to invest better.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: ? Overview of Your Current Situation
– Age 35, salary Rs.1 lakh take?home monthly.
– Home loan of Rs.28.75 lakh taken in Dec?2024.
– EMI is Rs.28,718 plus Rs.20,000 extra principal each month.
– You’ve repaid Rs.5.4 lakh so far and shortened tenure to 130 months.
– Medical insurance of Rs.10 lakh in place.
– Mutual fund SIP of Rs.5,000 in a flexi?cap fund started last month.
– Post Office scheme: Rs.5 lakh for 50?year tenure, 3 years completed.
– Monthly expenses Rs.25–30k; aim to reduce to Rs.20k.
– Kid in UKG school with annual fee of Rs.57k.
– Small quantity stock investments monthly (Dr Reddy’s, ITC, Karnataka Bank).
– Car and bike insurance/maintenance costs ~Rs.17,200 annually.
– Additional employer-provided medical cover of Rs.12 lakh total.
– Emergency fund saving has just begun at Rs.10k/mo aiming for Rs.3 lakh.
– Retirement goal without further loans or EMIs.

? Mistakes and Areas to Correct
– High EMI burden: EMI + extra payment consumes nearly half your net salary.
– Insufficient emergency fund: Needs 3–6 months expenses (Rs.60–80k minimum).
– Single mutual fund exposure: Just one fund limits diversification and goal alignment.
– Post Office scheme rigidity: Locked till age 50; lower return compared to MFs.
– Small direct stock investments: Without diversification adds unnecessary risk.
– Insurance gap: Health cover seems fine, but consider top?up if family needs grow.
– No retirement planning fund: Start building your retirement corpus systematically.

? Debt Management Strategy
– You are overpaying home loan principal every month.
– Extra prepayment is reducing interest but strains cash flow.
– Consider reducing extra EMI temporarily to free funds for investments.
– Evaluate interest rate of loan vs. expected returns from investments.
– If loan interest > 8–9%, additional repayment still makes sense.
– But balance is needed to avoid liquidity crunch.
– Aim to clear home loan by around age 50 ideally.

? Emergency Fund Setup
– Emergency corpus must cover at least 3–6 months of expenses.
– At Rs.20k/mo spending, this equals Rs.60–120k.
– You’ve started but need to accelerate savings.
– Increase to Rs.15–20k monthly until target reached.
– Hold this in a liquid or ultra?short mutual fund.
– This ensures safety and instant access in crises.

? Insurance Cover Review
– Your term life insurance is essential and sufficient for now.
– You have employer and personal health cover totalling Rs.12 lakh.
– Consider higher cover if your child grows or dependents increase.
– Don’t mix investment and insurance; avoid ULIPs or endowments.
– You have no LIC/ULIP, so no need for surrender or reinvestment advice.
– Add critical illness or accident cover depending on family needs.

? Investment Allocation Strategy
– You can invest Rs.55k minus EMI and liabilities.
– After EMI and expenses, aim for at least Rs.30k–Rs.40k/month towards investments.
– Build a diversified portfolio across fund categories:

Equity diversified/flexi?cap – core growth

Large?cap or multi?cap – stability with growth

Mid?cap / small?cap – for higher returns potential

Hybrid balanced – moderate risk with income

Debt funds – safety and regular plan support

– Example monthly SIP allocation:

Equity diversified/multi?cap: Rs.12,000

Mid?cap: Rs.8,000

Small?cap: Rs.5,000

Hybrid balanced: Rs.7,000

Debt fund: Rs.8,000

Flexi?cap fund: retain your existing Rs.5,000

Liquid fund: Rs.5,000 to build emergency fund

– This gives ~65% equity and 35% debt allocation—suitable for your age and goals.

? Why Actively Managed Funds Over Index Funds
– You currently invest in a flexi?cap fund (actively managed).
– Index funds simply mirror the market, can’t generate outperformance.
– In Indian markets, inefficiencies allow actively managed funds to add value.
– Through regular plans, you get professional insights, rebalancing, and goal tracking.
– Direct plans lack this oversight.
– Actively managed funds with CFP?driven review give structure and better results long term.

? Handling Existing Investments
– Evaluate your flexi?cap fund’s performance and risk profile.
– If aligned, retain it; otherwise, consider switching.
– Use a Systematic Transfer Plan (STP) to bring the Post Office scheme into your diversified portfolio gradually.
– Gradual transfer reduces timing risk and improves return potential.
– Stocks: your small direct holdings are okay for learning, but limit exposure to 5% of portfolio.
– Consider increasing mutual fund investments for core wealth growth.

? Goal-Based Planning for Your Child
– Your child is in UKG; school fees are Rs.57k per year.
– Account for rising education costs as years progress.
– Establish a dedicated SIP for education, such as Rs.5,000 per month.
– This ensures education costs are covered without derailing retirement goals.

? Retirement Corpus Building
– Start now with a plan aiming for Rs.2–3 crore by age 60.
– You have 25 years horizon.
– With the suggested SIP allocation, and annual increment, your goal is achievable.
– Increase SIPs as salary rises; consider using bonuses and increments for top?ups.
– Keep reviewing allocations annually.
– Regular contributions compound effectively over long periods.

? Portfolio Review and Rebalancing
– Review portfolio every 12 months.
– Evaluate fund performance, fund manager track record, style drift.
– Rebalance to your original allocation if drifted more than 5–10%.
– Increase allocation to goals (child education, retirement) as life evolves.

? Tax Awareness and Efficiency
– Equity fund profits: LTCG over Rs.1.25 lakh taxed at 12.5%, STCG at 20%.
– Debt fund gains taxed as per income slab.
– Hybrid funds taxed like equity after 3 years.
– Use long?term holds and small systematic exits for tax efficiency.
– Retirement and education goals benefit from tax?efficient structures.
– A Certified Financial Planner can help optimise your tax strategy within investment plan.

? Behavioural Finance – Stay Disciplined
– Market swings are normal; do not react emotionally.
– Avoid stopping SIPs during corrections.
– Trust your planning and professional evaluations.
– Stay focused on your long?term goals.
– Periodic small top?ups during dips can improve returns.

? Role of a Certified Financial Planner
– Helps define goals and timelines clearly.
– Designs asset allocation per risk profile.
– Selects right fund categories and performs due diligence.
– Performs regular review, rebalancing, and progress tracking.
– Helps with tax?efficient investment and withdrawal planning.
– Reduces emotional errors and increases returns over time.

? Final Insights
– You have strong earning and saving habits.
– Your EMI discipline and additional principal repayment are commendable.
– Mistakes lie in insufficient emergency fund and limited diversification.
– You must build better liquidity buffers and diversify investments.
– Shift Post Office scheme into mutual funds via STP gradually.
– Increase SIP to Rs.30–35k/month initially, with education SIP too.
– As EMI burden reduces, ramp up investment to Rs.40–45k/month.
– Continue contributing small direct stock amounts as learning exposure.
– Prioritise actively managed mutual funds via MFD and CFP guidance.
– Review your portfolio regularly and rebalance yearly.
– Stay insured and build goal?specific funds.
– This structured strategy will help you retire comfortably.
– It ensures your kid’s education is funded.
– And keeps you loan?free, financially secure, and future?ready.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: You are just 33 years old with a healthy monthly income of Rs 1.5 lakh. You are already doing some good things. You’ve started a SIP. You have taken steps towards life insurance. You are thinking early about your children’s future.

Let us now do a complete 360-degree analysis. I will guide you on what to do additionally. Also, I will help you plan well for your future goals.

? Understanding Your Current Financial Snapshot

– Monthly income is Rs 1.5 lakh.
– Personal loan EMI is Rs 50,000.
– You give Rs 10,000 monthly to your wife for savings.
– House rent is Rs 6,000.
– Household expenses are Rs 10,000.
– SIP of Rs 10,000 has started.
– Twins are 1 year old now.
– You are planning a term policy of Rs 1 crore soon.
– You need Rs 1.5 crore in 10 years for future goals.

Your income-to-expense ratio is manageable. But EMI burden is slightly high now.

? Monthly Cash Flow Position

– Total monthly outflow = EMI Rs 50,000 + Rent Rs 6,000 + Expenses Rs 10,000 + SIP Rs 10,000 + Wife Rs 10,000.
– Total = Rs 86,000 per month.
– Balance left = Rs 64,000.

So, you have Rs 60,000+ left monthly. This is a good cash surplus.

But remember, personal loan EMI is temporary. Once paid off, you will save more.

Till then, do not increase expenses unnecessarily.

? Evaluation of Your Personal Loan EMI

– EMI of Rs 50,000 is high for your income.
– If it’s for 2-3 more years, no problem.
– Try not to take another loan during this time.
– Avoid credit card dues or consumer loans.
– After this EMI ends, increase investments.

Also, if possible, try prepaying a part of this loan every year. Even 1 or 2 EMIs paid early helps reduce stress.

? SIP Investment and Asset Allocation

– You are doing SIP of Rs 10,000 in midcap fund.
– That’s a good start but risky if done alone.
– Midcaps can be volatile in short-term.
– Better to add one large-cap or flexi-cap fund too.
– Balanced allocation is safer.
– Invest through a regular plan with MFD and CFP support.
– Direct funds may save cost but lack professional guidance.
– Regular funds come with MFD’s review and support.
– Stay with SIP for 20 years. But add more funds gradually.

Later, increase SIP by Rs 5,000 every 6-8 months as EMI burden goes down.

? About Index Funds and Why You Should Avoid

– Index funds just follow market indices.
– They do not try to beat market.
– They have no active fund manager.
– If markets fall, they also fall fully.
– They don’t protect downside.
– No risk management is done in index funds.
– Actively managed mutual funds are better.
– A fund manager works hard to protect and grow your money.

For your long goals like kids and retirement, active funds offer better flexibility and control.

? Your Upcoming Term Insurance Plan

– You plan to take Rs 1 crore term cover.
– Policy duration is till age 85.
– That’s good coverage for a start.
– Rs 60,000 premium yearly for 10 years seems a limited pay term plan.
– This is fine if this is a pure term policy.
– If it’s investment-cum-insurance or ULIP, then avoid it.
– If this is a combo plan, it is expensive.
– Term insurance should be pure risk cover.
– No savings. No maturity.

Please recheck the product structure. Only go ahead if it’s pure term cover.

? Emergency Fund and Insurance Planning

– Keep minimum 6 months of expenses in bank or liquid fund.
– That’s Rs 1 lakh to Rs 1.5 lakh.
– This is emergency cushion. Do not touch it unless needed.
– Also take health insurance for yourself and family.
– Don’t depend only on company policy.
– For twins, buy separate family floater health cover.

Medical costs are rising. Early health cover avoids future rejections and limits.

? Planning for Rs 1.5 Crore in 10 Years

– You said you need Rs 1.5 crore in 10 years.
– Not clear if it’s for children’s career or other purpose.
– Anyway, this is a big goal.
– To build this, you need to invest at least Rs 60,000 per month.
– You have monthly surplus. Use that slowly.

Next steps:
– After loan ends, move EMI amount fully into SIP.
– Add balanced mutual funds or flexi-cap funds.
– Also invest in a few child-focused mutual fund schemes.
– Track your fund performance yearly with MFD + CFP help.

Avoid real estate. It locks your money and gives low returns.

? Planning for Children’s Cricket Career

– You wish to put twins into cricket coaching.
– Start planning for this after 2 years.
– Coaching cost can be high.
– It includes academy fees, travel, equipment, diet and match fees.
– Make a separate child goal investment for this.
– Estimate total cost after 2-3 years.
– Start SIPs for that goal separately.

Also, be open to their career interest. Sports is a passion-driven field. Encourage but support academically too.

? Setting Up Investments For Children

– Twins are 1 year old.
– You have long time for college, marriage, career.
– Start one mutual fund each in their name.
– Use children’s benefit funds or balanced hybrid funds.
– These funds adjust between equity and debt smartly.
– Keep investing for 15-20 years without stopping.

Also, assign nominations. And review fund growth every year.

? Wife’s Financial Involvement

– You give Rs 10,000 monthly to your wife.
– Make sure this is invested wisely.
– Don’t let it sit idle in bank account.
– Open mutual fund folio in her name.
– Invest in regular plans with CFP + MFD guidance.

Her involvement in financial planning is very important. Let her learn and decide together.

? Long-Term Retirement and Wealth Creation Plan

– You have 27 years till age 60.
– That’s a great time frame.
– After loan ends, raise SIP to Rs 40,000 to Rs 50,000.
– Split across large-cap, flexi-cap, balanced, hybrid and multi-cap funds.
– Diversify but don’t overdo.
– Use a mix of growth and stability in mutual funds.

Don’t try to trade stocks or time markets. Stick to mutual fund route for better success.

? Things to Avoid Financially

– Don’t buy ULIP, endowment, or combo insurance plans.
– Don’t depend on direct stocks unless you are an expert.
– Don’t chase high-return schemes or Ponzi apps.
– Don’t buy land or plots thinking it will double soon.
– Don’t use credit cards for EMI purchases.

Stick to simple and transparent products. Wealth is created by habits, not tricks.

? Tax Planning Suggestions

– Use full 80C limit – PPF + ELSS + Life insurance.
– Use ELSS mutual funds through regular plan route.
– Avoid traditional LIC policies unless already bought.
– Use NPS if your employer supports it.

Track capital gains if you redeem mutual funds.

LTCG above Rs 1.25 lakh is taxed at 12.5%.

STCG is taxed at 20%.

Debt fund gains are taxed as per income slab.

Take tax filing help yearly to stay clean and safe.

? Increasing Investments Every Year

– Increase SIP by 10% every year.
– If you earn more, save more.
– Don’t raise lifestyle too fast.
– Review your plan every year with a CFP.

A disciplined plan for 20+ years gives financial freedom.

? Finally

– You are on the right track.
– Your earnings are good. Your family is young.
– Loan is the only short-term burden. It will end soon.
– After that, you must shift fully into investing.
– Keep increasing SIP. Don’t stop for market fear.
– Make sure your term plan is pure cover only.
– Don’t buy real estate or fancy policies.
– Take health cover for family immediately.
– Start planning kids’ sport career slowly. Be supportive.

Stay simple. Stay focused. Stay committed.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment