Sir I am govt servant having income around 1 .2 lakh IN HAND AROUND RS 90000/- from which 30000 home loan emi PL 4000 EMI CREDIT CARD amount minimum due 5000 monthly around , LIC for son emi 2100 , health insurance 10 lakh NO LIQUID FUNDS AS BUILT HOME , lots of things in home are still pending . Please suggest some financial advice . Regards

Ans: You are a responsible government employee. You are paying loans on time. You are also protecting your family with insurance. That shows sincerity and care for your loved ones. Your current phase is tight. But with a focused plan, you can recover and grow peacefully.

Now, let us work step-by-step. We will restructure your finances with clarity. This answer will cover all key areas. It will help you build strength in your money life.

Current Income and Obligations
Your monthly in-hand salary is around Rs. 90,000.

Let us look at your key monthly obligations:

Home Loan EMI: Rs. 30,000

Personal Loan EMI: Rs. 4,000

Credit Card Minimum Payment: Rs. 5,000

LIC Policy Premium (for son): Rs. 2,100

Health Insurance Premium: Already Paid (Rs. 10 lakh coverage)

So nearly Rs. 41,100 is going for loans and insurance monthly. That leaves Rs. 48,900 for other expenses.

This looks manageable. But due to home construction and pending purchases, cash stress has built up.

Let’s now look at each area and offer professional action points.

Step 1: Create a Zero-Based Monthly Budget
Start with a very simple budget. List your actual spending.

Write down every rupee spent. Include food, fuel, medicine, mobile, fees, utilities.

Do this:

Set Rs. 5000 aside for emergency savings. Start this every month. Even if small.

Limit monthly lifestyle spending to Rs. 25,000 maximum. Include all groceries, fuel, school, etc.

Leave Rs. 18,000–20,000 monthly for debt, dues, and future savings.

A Certified Financial Planner always starts with cash flow awareness. Without that, no progress happens.

Step 2: Handle Credit Card Payments First
Credit cards charge the highest interest. More than personal loans. Sometimes 36–42% annually.

If you pay only minimum due, your loan doubles fast.

Here is the action plan:

Stop using the credit card completely. Only use cash or debit card now.

Pay at least Rs. 10,000 or more monthly, not just Rs. 5,000.

If not possible, take a low interest loan and clear the card fully.

Avoid rolling over payments. Interest is compounding daily.

After clearing, never delay card payment again.

This step alone will reduce your stress by half in 6 months.

Step 3: Reduce Unwanted EMIs
Personal loans are often taken to manage temporary needs. But they affect future planning.

Follow this:

Personal Loan EMI of Rs. 4,000 is not heavy. If interest rate is high, refinance.

Try closing this loan within 12 months. Use any bonus or extra income.

Don’t take new loans to buy home items. Buy in parts. Go slow.

Your home is already built. Focus now on comfort, not speed.

Patience is also a financial strategy.

Step 4: Pause or Review Insurance Premium
You are paying Rs. 2,100 monthly for your son’s LIC policy.

Please check:

If it is endowment or child money-back plan, you can surrender.

These plans give very low return. Usually 4% or less.

After surrender, invest same money in mutual funds. Returns can be double.

Insurance should be pure term policy only.

Check surrender value. If it is more than paid premiums, take it. Then stop the policy.

This step will free up monthly money for better investments.

Step 5: Emergency Fund Must Be Built
You mentioned that liquid funds are not created yet.

This is risky. Any small emergency can break your budget.

Please do this:

Start keeping Rs. 5,000 monthly aside. Use recurring deposit or liquid fund.

Do this for next 12 months. Target Rs. 60,000 corpus.

Use this fund only for hospital, job loss, or urgent travel.

Don’t mix it with savings for expenses. Keep it separate.

This is your financial shield. Always keep it active.

Step 6: Basic Mutual Fund Investment Plan
Once your credit card and personal loan are reduced, you will have extra money monthly.

Here is what to do then:

Start SIP of Rs. 2,000–3,000 in a good flexi-cap mutual fund.

Choose regular plan through a mutual fund distributor with CFP credential.

Avoid direct plans. They look cheaper but offer no guidance or support.

Review SIP performance every year. Keep it running for 10+ years.

This will grow into your wealth fund. Use for your child’s education or your retirement.

You don’t need to invest in real estate again. Home already done.

Step 7: Term Life Insurance for You
This is very important. Your family depends on your income.

Please ensure:

You buy pure term insurance of Rs. 50 lakh minimum.

Premium will be low. Less than Rs. 800 per month.

Do not mix insurance with investment.

This will protect your family’s future if anything happens to you.

Do this before investing anywhere else.

Step 8: Protect Health Fully
You already have Rs. 10 lakh health insurance. This is good.

Check these:

Is it family floater or individual? Family floater is better.

Check for room rent limit. Choose no-cap plans if possible.

Ensure critical illness cover is added. Small top-up may help.

Even a small hospitalisation can wipe out savings. This step gives peace of mind.

Step 9: Buy Home Needs One By One
Your house is built. Some items are still pending. That is okay.

No need to finish everything this year.

Here is what a certified financial planner will suggest:

List all pending items. Prioritise based on need. Not comfort.

Allocate Rs. 5,000–10,000 monthly for one-time buying.

Don’t take EMIs or swipe card for furniture or electronics.

Consider second-hand or refurbished items if money is tight.

Avoid trying to make your home perfect in one go. Take small steps. You will reach there.

Step 10: Family and Children’s Planning
You are a responsible parent. Keep these two things in mind:

Your child’s education is more important than gifting or luxuries.

Avoid pressure of giving too much now. Build wealth slowly.

Involve spouse in budgeting and planning. Helps reduce stress.

Every parent wants the best. But best comes with long-term discipline, not fast spending.

Step 11: Track Everything on Paper
Use a simple notebook or Excel sheet.

Write down every expense.

Update monthly EMI payments.

Track savings and goals.

This improves your money awareness. You will feel more in control.

Financial peace starts with clarity.

Step 12: Stay Away from These Mistakes
Please avoid these common traps:

Don’t use credit card for regular monthly shopping. Use only in emergencies.

Don’t fall for chit funds, quick schemes, or unregulated apps.

Don’t borrow from friends or relatives unless urgent.

If in doubt, always ask a certified financial planner.

Finally
You are already doing many things right. You are paying EMIs. You are insured. You have built a home.

Now just follow this structure:

Clear credit card dues fast.

Create emergency fund slowly.

Review insurance policies. Remove bad ones.

Start small SIP in good mutual funds later.

Buy household items one-by-one. No extra loans.

By following this plan, you will build financial peace. It may take time, but it will surely come.

Stay consistent. Stay simple. That is the only real way to build wealth.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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