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Ramalingam Kalirajan  |6986 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 20, 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
Supercell Question by Supercell on May 16, 2024Hindi
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Hi! I am having financial crisis, my take home salary is 55k, I have a personal loan EMI of 19.7k(upto sep.26), monthly expenses around 20k. Also took an overdraft of 1.25 lakhs for medical emergency. Still every month I spent 6-7 k on my wife's treatment. How can I plan for future saving. Should I anyhow lower my emi

Ans: Understanding Your Financial Crisis
Financial crises can be overwhelming, but with a strategic approach, you can regain control. Your situation includes a personal loan EMI of ?19.7k, monthly expenses of ?20k, and ongoing medical costs for your wife amounting to ?6-7k per month. Additionally, you have an overdraft of ?1.25 lakhs.

Analyzing Your Current Situation
Income and Expenses:

Your take-home salary is ?55k.
Total monthly commitments are around ?45-46k, leaving little room for savings.
Debt Obligations:

Personal loan EMI until September 2026.
Medical overdraft increasing financial strain.
Steps to Financial Stability
1. Evaluate and Lower Your EMI
Lowering your EMI could provide immediate relief. Consider the following strategies:

Loan Restructuring:

Contact your bank to negotiate a longer repayment term or a lower interest rate.
This will reduce your monthly EMI and ease your cash flow.
Refinancing Options:

Explore refinancing the loan with a different lender offering lower interest rates.
This can significantly reduce your monthly payment burden.
2. Create a Detailed Budget
Effective budgeting is crucial. Here's how to start:

Track Your Expenses:

Monitor every expense, no matter how small.
Identify non-essential expenditures that can be minimized or eliminated.
Prioritize Spending:

Focus on essential expenses like medical costs and loan EMIs.
Allocate any surplus towards savings or debt repayment.
3. Increase Your Income
Boosting your income can provide additional financial stability:

Freelance or Part-Time Work:

Look for opportunities to utilize your skills in freelance or part-time jobs.
Even a small additional income can make a significant difference.
Upskilling:

Invest time in learning new skills that can lead to a higher-paying job.
Online courses and certifications can enhance your qualifications.
4. Emergency Fund
Building an emergency fund is essential for financial security:

Small, Regular Contributions:

Start with small, manageable amounts each month.
Aim to save at least ?1,000-?2,000 initially, then gradually increase.
Automate Savings:

Set up an automatic transfer to a separate savings account.
This ensures consistent contributions without relying on manual efforts.
5. Address Medical Expenses
Managing ongoing medical costs is critical:

Insurance:

Ensure you have adequate health insurance coverage.
Explore family floater plans or additional riders for comprehensive coverage.
Government Schemes:

Investigate government healthcare schemes that might offer support for your wife's treatment.
Schemes like Ayushman Bharat can provide significant relief.
Adopting a Napoleon Hill Mindset
Napoleon Hill, in his seminal work "Think and Grow Rich," emphasized the power of desire, faith, and persistence. Apply these principles to your financial journey:

Desire:

Clearly define your financial goals, such as becoming debt-free and building savings.
Write them down and visualize achieving them daily.
Faith:

Believe in your ability to overcome financial challenges.
Cultivate a positive mindset and remain confident in your financial recovery plan.
Persistence:

Stay committed to your budget and savings plan.
Overcome setbacks with determination and adapt your strategy as needed.
Conclusion
Your financial situation requires careful planning and strategic action. By lowering your EMI, creating a detailed budget, increasing your income, building an emergency fund, and managing medical expenses, you can achieve financial stability. Embrace the principles of desire, faith, and persistence to navigate this challenging period and secure a brighter financial future.

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

Ramalingam Kalirajan  |6986 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 22, 2024

Asked by Anonymous - May 22, 2024Hindi
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I am 33 years old and earning 1.5L per month. I have personal loan of emi 46k and car loan of 22k per month. I have started an SIP of 10k per month and I do have 2 LICs around 70k per year. As of now I don't have any savings and most of my salary is going to these emis credit card bills. I need help in better financial planning and save at least 1CR in next 10 years. Pls suggest.
Ans: It's commendable that you're seeking guidance to improve your financial situation. Let's delve into a comprehensive plan to help you achieve your goal of saving 1 crore in the next 10 years.

Current Financial Snapshot
Firstly, let's assess your current financial standing. With an income of 1.5 lakhs per month, you're earning a decent salary. However, your EMIs for personal and car loans are consuming a significant portion of your income, leaving little room for savings. It's essential to address this imbalance to pave the way for wealth accumulation.

Debt Management Strategy
Your priority should be to reduce high-interest debt. While EMIs are essential commitments, consider evaluating options to refinance or consolidate your loans to lower interest rates. This would alleviate some financial burden, allowing you to allocate more towards savings.

Optimizing Expenses
Review your expenses meticulously to identify areas where you can cut back. Analyze your monthly spending patterns and distinguish between essential and discretionary expenses. Trim unnecessary costs and redirect those funds towards debt repayment and savings.

Emergency Fund
Building an emergency fund is imperative to handle unexpected expenses without resorting to additional borrowing. Aim to set aside at least 3 to 6 months' worth of living expenses in a liquid, accessible account. This fund acts as a financial safety net during unforeseen circumstances like medical emergencies or job loss.

Strategic Investment Approach
Your SIP and LIC policies are steps in the right direction, but optimizing your investment strategy can yield better returns. Instead of solely relying on LIC policies, explore diverse investment avenues tailored to your risk appetite and financial goals. Consider diversified mutual funds managed by seasoned professionals to maximize growth potential.

Retirement Planning
It's never too early to plan for retirement. Allocate a portion of your savings towards retirement accounts like EPF or PPF, which offer tax benefits and long-term growth potential. Additionally, consider investing in retirement-focused mutual funds to build a robust corpus for your golden years.

Wealth Creation Roadmap
To achieve your target of 1 crore in 10 years, you'll need a disciplined approach to wealth creation. Calculate the monthly savings required to reach this goal, factoring in inflation and investment returns. Adjust your budget accordingly to ensure you're consistently contributing towards your financial objectives.

Regular Financial Reviews
Periodic reviews of your financial plan are essential to track progress and make necessary adjustments. As life circumstances change, your financial strategy should evolve accordingly. Consult with a Certified Financial Planner regularly to fine-tune your plan and stay on course towards your wealth-building goals.

Conclusion
In conclusion, by adopting a strategic approach to debt management, expense optimization, and diversified investments, you can pave the way towards financial freedom and achieve your goal of saving 1 crore in the next decade. Remember, consistency and discipline are key ingredients for success on this journey to wealth creation.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6986 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 16, 2024

Money
hi, i am 46 year old central government employee in Pune, I had several bad financial decision in my life. i have two daughters aged 11 and 17 i have no saving left, i have a flat in pune with liability of 38lac on home loan and 10 lac on personal society loan at 9% interest i have a ancestral property of 50 lac in Tamil nadu where my mom lives per month iam paying 550000 as home loan and personal loan EMI, My income is around 86000 how can I come out of this EMI burden and improve financial stability
Ans: Understanding Your Financial Situation
First, let me commend you for reaching out for guidance. It's never too late to improve your financial situation. You have two daughters to support and considerable loan burdens, which makes it essential to adopt a well-structured plan to regain financial stability.

Current Income and Expenses
Your current income is Rs. 86,000 per month. However, a significant portion of this income goes towards EMI payments. You are paying Rs. 5,50,000 annually towards home loan and personal loan EMIs, which is a heavy burden. This leaves limited room for savings and other expenses.

Loan Burden Analysis
The home loan liability is Rs. 38 lakh, and the personal society loan stands at Rs. 10 lakh. The home loan EMI is likely a major part of your monthly expense. Given the 9% interest rate on the personal loan, it is essential to address this first due to its higher interest rate compared to many other debt forms.

Asset Overview
You have an ancestral property worth Rs. 50 lakh in Tamil Nadu, where your mother lives. While this property holds significant value, it is tied to emotional and familial considerations.

Steps to Improve Financial Stability
Reassess and Prioritise Debts
Prioritise High-Interest Debts: Focus on reducing high-interest debts first. The personal loan at 9% interest is more expensive than typical home loans. Prioritising its repayment can save you significant interest over time.

Consider Debt Consolidation: Look into consolidating your personal and home loans. Consolidating at a lower interest rate can reduce the overall EMI burden. Discuss with your bank for possible consolidation or refinancing options.

Utilising Assets
Evaluate Ancestral Property: While the ancestral property is valuable, it might be worth considering its role in your financial recovery. You might explore options like renting out a portion of the property for additional income.

Downsize or Rent: If possible, you might consider downsizing your living space in Pune or renting out a portion of your flat to generate extra income. These steps can help manage EMIs more comfortably.

Budgeting and Expense Management
Create a Detailed Budget: Track all your income and expenses meticulously. Identify areas where you can cut down unnecessary costs. Budgeting helps in allocating resources more efficiently and finding ways to save money.

Emergency Fund: Establish a small emergency fund to cover unexpected expenses. Even a modest fund can prevent you from taking on more debt during emergencies.

Increasing Income Streams
Leveraging Skills and Opportunities
Freelancing or Part-Time Work: Explore opportunities to leverage your skills through freelancing or part-time work. Additional income from side gigs can significantly help in managing loan repayments.

Utilise Government Benefits: As a central government employee, explore any available benefits, allowances, or grants that might assist in your financial situation.

Investments and Savings
Start Small Investments: Begin with small, regular investments in safe, growth-oriented funds. Consult a Certified Financial Planner to select funds that align with your risk tolerance and financial goals.

Employer-Provided Benefits: Maximise contributions to government-provided savings schemes and benefits. These can provide tax advantages and enhance your financial security.

Reviewing and Adjusting Insurance
Insurance Policies
Evaluate Existing Policies: If you have LIC, ULIP, or investment-cum-insurance policies, consider their current value and benefits. These policies might not be the most efficient use of your funds.

Surrendering Underperforming Policies: If your policies are underperforming, you might consider surrendering them and redirecting those funds into more effective investments, such as mutual funds managed by certified professionals.

Adequate Coverage
Health Insurance: Ensure you have adequate health insurance coverage. Medical emergencies can drain savings and push you further into debt.

Life Insurance: Maintain sufficient life insurance to protect your family’s financial future in case of unforeseen events.

Planning for Children's Education
Education Fund
Separate Fund for Education: Create a separate education fund for your daughters. Even small, regular contributions can grow significantly over time.

Scholarships and Grants: Research scholarships, grants, and educational loans that can help fund your daughters' education without straining your finances.

Long-Term Education Planning
Invest in Education Plans: Consider education-specific investment plans. These can offer returns aligned with the timeframes of your daughters' educational needs.

Consult a CFP: A Certified Financial Planner can help tailor an education savings plan that suits your financial situation and goals.

Building a Sustainable Financial Plan
Setting Financial Goals
Short-Term Goals: Focus on immediate goals like reducing debt and creating an emergency fund. These are crucial for stabilising your financial situation.

Long-Term Goals: Set long-term goals for retirement, children's education, and eventual financial independence. A CFP can help you set realistic and achievable goals.

Monitoring and Reviewing
Regular Financial Check-Ups: Conduct regular reviews of your financial situation. Adjust your plans as needed to stay on track towards your goals.

Professional Guidance: Regular consultations with a Certified Financial Planner can provide ongoing support and adjustments to your financial strategy.

Final Insights
Improving your financial situation requires a multi-faceted approach. Prioritise paying off high-interest debts and consider refinancing options to reduce your EMI burden. Utilise your assets effectively, and explore additional income opportunities. Establish a disciplined budgeting and savings strategy to build financial stability.

Consider the future needs of your family, particularly your daughters' education, by creating dedicated funds and exploring scholarships. Regularly review your financial plan and adjust as necessary to stay on track. Engaging a Certified Financial Planner can provide personalised advice and support throughout your financial journey.

Your determination and willingness to improve your financial situation are commendable. By taking these steps, you can work towards a more stable and secure financial future for yourself and your family.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6986 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Asked by Anonymous - Jul 16, 2024Hindi
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Money
Dear Sir, I am 38 years old, happily married and working in as IT professional. My monthly take home is around 92K. My current personal loans are having an balance around 9 Lakhs and an hand loans around 4 Lakhs. My current EMI cut off is around 85K due to bad financial planning in last few years due to personal emergencies, i have been incurring losses and unable to save salary. Personal loans will finish by February 2025, but unable to cope with the monthly EMIs and due to this it is having negative impact in cibel score. Could you please suggest me on how to plan things for short term and also on long term.
Ans: You are 38 years old, happily married, and working in IT. Your monthly take-home salary is Rs. 92,000. You have personal loans with an outstanding balance of Rs. 9 lakhs and hand loans of Rs. 4 lakhs. Your current EMI cut-off is Rs. 85,000. Personal loans will be cleared by February 2025.

Immediate Steps for Debt Management
Prioritize High-Interest Loans
Focus on clearing high-interest loans first. These are costly and impact your finances. Prioritizing them will ease financial pressure.

Negotiate with Lenders
Talk to your lenders. Request for lower interest rates or extended payment terms. This can reduce your monthly EMI burden.

Consolidate Loans
Consider consolidating multiple loans into a single loan. This can lower your overall interest rate. It simplifies payments and reduces stress.

Cut Unnecessary Expenses
Identify and cut unnecessary expenses. This will free up funds to pay off debts. Focus on essential expenses only.

Mid-Term Planning
Emergency Fund
Start building an emergency fund. Aim for 3-6 months of expenses. This provides a safety net for future emergencies.

Financial Discipline
Stick to a strict budget. Avoid unnecessary expenses. Ensure timely payment of EMIs to improve your CIBIL score.

Long-Term Financial Planning
Investing in Mutual Funds
Once debts are cleared, start SIPs in mutual funds. Diversify your investments across equity, debt, and hybrid funds. This will help in wealth creation.

Retirement Planning
Start saving for retirement. Consider PPF and NPS for long-term benefits. Regular contributions will ensure a comfortable retirement.

Children’s Education
Plan for your children’s education. Start investing in child-specific mutual funds. Ensure their future is financially secure.

Final Insights
Focus on clearing high-interest loans first. Negotiate with lenders for better terms. Build an emergency fund. Plan for long-term goals with disciplined investing.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Anu Krishna  |1281 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 07, 2024

Asked by Anonymous - Oct 07, 2024
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Anu Krishna  |1281 Answers  |Ask -

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Help me!!! 1.I'm starting new "work" on my own(challenging for me) but my mind says quit it, be quite & do nothing. I myself don't know that wether the result of work will be +ive or uncompleted like alws. 2. My mind has become like order seeker type, when someone orders me, I do those things with dedicated(but sad from inside) manner. But when myself will try something different(which i fear, but necessary) then. "I QUITS IT" & sometimes I don't even start. 3. I'm like stuck no clue what/whom I want to do in life, I'm in cllg(1 yr) doing (CSE) ,. 4. I want to do/try (sports,talking girls,study,stocks,coding..) many things, but myself, my thoughts(overthinker), R like just be in the place where u are[confused,po*n,think about past/future(being billio..re,olympics..), girl (that u liked & never talked), abusive/beating self,.. sometimes feels like end life, but don't hv courage for that also.. 5. I tried self help books, spirituality, god, self affirmation, writing... & thay affected me(sometimes) but for only some time, then again that devil me comes up &these things never get completed. As no one in my family knows about all these, so that's Y ,I hv to fight/loose/try again, the battles with myself.
Ans: Dear Harsh,
If in the past you have had the urge to QUIT, how is this time going to be different? This is not to discourage you from taking up 'new work' but pointing out that there is some amount of work that you need to put to clear the mind out of blockages.
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Also, focus on one thing at a time; study and go deep into it...what's this thing with work? I don't understand. When the mind is unsettled, take one thing/activity, pursue it and finish it. It could simply be studying for Year 1 of your college...just only do that...once your mind is trained in completing an activity, you can add another one the next year along with studying and then pursue both...it could be some sport and studying...then the next year, you could add a third activity. This is called 'training the mind in discipline'. Discipline will make sure that you start and finish things...So, go slow and do one thing at a time.

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Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

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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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