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Can I manage with 1.5k income, 50k expenses, 2 kids & 9L loan?

Ramalingam

Ramalingam Kalirajan  |8033 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 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 - Jul 08, 2024Hindi
Money

Hi ma'am, my earning is 1.5k pm house expenses is around 50k pm and have 2 kids 5 (girl) &2yrs(boy) , i have 10k mf(pm), i have loan (without interest) is around 9lac, how don I plan my financial. Thanks in advance... ????

Ans: With a monthly earning of Rs 1.5 lakhs and house expenses around Rs 50,000, managing your finances effectively is crucial, especially with two young children, a girl aged 5 and a boy aged 2. You also mentioned a monthly mutual fund investment of Rs 10,000 and an interest-free loan of Rs 9 lakhs. Let's break down your financial situation and develop a comprehensive plan to ensure your financial goals are met.

Monthly Budgeting and Cash Flow Management
First, let's evaluate your monthly cash flow. Your income is Rs 1.5 lakhs, and house expenses are Rs 50,000. This leaves you with Rs 1 lakh for other financial commitments and savings.

You are already investing Rs 10,000 in mutual funds monthly. This is a positive step towards building your financial future. However, let's look at other potential expenses and savings.

Emergency Fund
An emergency fund is essential. It provides a safety net for unexpected expenses like medical emergencies or job loss. Aim to save at least 6 months of your living expenses. With house expenses of Rs 50,000, your emergency fund should be around Rs 3 lakhs.

Start by setting aside a portion of your monthly surplus until you reach this target. This fund should be kept in a liquid and accessible form, such as a savings account or a liquid mutual fund.

Managing Your Loan
You have an interest-free loan of Rs 9 lakhs. While the lack of interest is beneficial, it's important to plan its repayment strategically. Allocate a portion of your monthly surplus to repay this loan. Without the pressure of interest, you can prioritize other financial goals but ensure timely repayments to maintain financial discipline.

Children's Education and Future Needs
Your children are young, but planning for their education and future expenses should start early. Consider starting a dedicated investment for their education.

You can allocate a portion of your monthly surplus to a mix of equity and debt funds tailored for long-term goals. Equity funds generally offer higher returns over the long term, while debt funds provide stability.

Retirement Planning
Even though retirement might seem far away, starting early can significantly ease the burden later. You can set aside a part of your monthly surplus for retirement.

Consider investing in a mix of equity and balanced funds to create a diversified portfolio. The power of compounding will work in your favor over the long term.

Reviewing Your Mutual Fund Investments
You are currently investing Rs 10,000 monthly in mutual funds. Let's evaluate the types of funds you're invested in. It's essential to have a balanced portfolio that aligns with your risk appetite and financial goals.

Actively managed funds can provide better returns than index funds due to the expertise of fund managers. While index funds simply track a market index, actively managed funds aim to outperform the market. They can be more flexible and adaptable to market changes.

Insurance Planning
Life Insurance

Adequate life insurance coverage is crucial, especially with dependents. Ensure you have sufficient term insurance to cover your family's needs in case of an unfortunate event. A cover of at least 10-15 times your annual income is generally recommended.

Health Insurance

With two young children, health insurance is a must. Opt for a family floater plan that provides adequate coverage for all family members. Ensure it includes benefits like cashless hospitalization, critical illness cover, and regular health check-ups.

Investment Strategy
Given your financial commitments and goals, a diversified investment strategy is essential. Regularly investing through a Certified Financial Planner can provide several advantages. They offer professional advice, helping you choose the right funds based on your goals and risk tolerance.

Direct mutual funds, while cheaper, require a deeper understanding of the market. With regular funds, you benefit from the planner’s expertise and ongoing portfolio management.

Tax Planning
Effective tax planning can help you save significantly. Utilize tax-saving instruments under Section 80C like PPF, EPF, and tax-saving mutual funds. Additionally, health insurance premiums qualify for deductions under Section 80D.

Long-Term Financial Goals
Setting clear financial goals is crucial. Whether it's buying a house, planning for children's higher education, or creating a retirement corpus, having specific targets helps in disciplined investing.

Review your goals periodically and adjust your investments accordingly.

Monitoring and Rebalancing Your Portfolio
Regularly monitoring your investments ensures they remain aligned with your goals. Market conditions change, and so should your investment strategy. Rebalance your portfolio at least annually to maintain the desired asset allocation.

Final Insights
Financial planning is an ongoing process. It requires regular review and adjustments. Your current financial habits, such as monthly mutual fund investments, are commendable. By focusing on budgeting, emergency funds, loan management, children's education, retirement planning, and adequate insurance, you can build a secure financial future.

Working with a Certified Financial Planner can provide you with tailored advice and help you navigate complex financial decisions.

Stay disciplined, review your goals regularly, and adjust your strategies as needed. Financial security is achievable with careful planning and consistent effort.

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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I am Ashish aged 52. I recently resigned from my job. At present i have following investments Rs 42 L shares 77 L Mutual Fund 25 L in PPF 15 L in one SBI insurance policy. I am expected to get 39 L from PF and gratuity. Also expected to get 22 Lakhs from LIC in 2030 and pension from LIC @ 2500/ per month from 2027. I do not have any loans nor my child education is pending. My son is appearing for CA finals. Only Group 1 of Finals is pending. My wife is a professional baker and is making around 40 K per month. My monthly expenses are 60 k. Pls guide how can i plan. At present i have 29 K SIP which i am planning to continue and is not included in 60 K expenses
Ans: Ashish, you've built a solid foundation with your investments and your wife's entrepreneurial spirit. It's admirable how you've planned ahead, especially with your son's education and your retirement in mind. Now, as you transition into this new phase of life, it's time to ensure your financial security. Have you considered diversifying your investments to spread the risk? And with your son's CA finals approaching, perhaps setting aside some funds for his future endeavors could provide peace of mind. Remember, life is a journey, and financial planning is just one part of it. Cherish the moments with your loved ones and embrace the changes that come your way. A Certified Financial Planner can help navigate this journey with expertise and care. Stay focused, stay resilient, and may your future be as fulfilling as your past achievements.

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Ramalingam Kalirajan  |8033 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 09, 2024

Asked by Anonymous - Jul 09, 2024Hindi
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Hi Sir, my earning is 1.5k pm. My house expenses is around 50k pm and have 2 kids 5 (girl) &2yrs(boy) , i have 10k mf(pm), i have loan (without interest) is around 9lac, how don I plan my finance. Thanks in advance... ????
Ans: Your situation reflects a balanced financial setup, and your desire to plan efficiently for your family’s future is commendable. Let’s delve into a comprehensive financial plan tailored to your needs.

Understanding Your Financial Landscape
You earn Rs. 1.5 lakhs per month and spend Rs. 50,000 on household expenses. This leaves you with Rs. 1 lakh per month for other financial goals and obligations. Your two young children require future financial planning for education and other needs.

You also invest Rs. 10,000 per month in mutual funds and have an interest-free loan of Rs. 9 lakhs.

Cash Flow Management
Effective cash flow management is the cornerstone of any financial plan. With Rs. 50,000 monthly expenses, you have a significant amount left for savings and investments. This positive cash flow is an excellent foundation.

First, let’s prioritize your current commitments and then focus on future goals.

Managing Debt
The interest-free loan of Rs. 9 lakhs is a boon. This reduces the burden compared to interest-bearing loans. Prioritize paying off this debt within a set timeline, ideally 2-3 years. Allocate a fixed amount monthly towards this repayment. Given your current savings potential, allocating Rs. 30,000 monthly will help clear this loan in about 30 months. This disciplined approach will free up more funds for investments later.

Emergency Fund
An emergency fund is crucial for unexpected situations. You should aim to save at least 6 months of your monthly expenses, which totals Rs. 3 lakhs. Given your savings capacity, start by setting aside Rs. 20,000 per month. In 15 months, you will have a sufficient emergency corpus.

Investment Strategy
Mutual Funds
Your current monthly SIP of Rs. 10,000 in mutual funds is a great start. Mutual funds offer a variety of options suitable for different risk appetites and goals.

Equity Mutual Funds
Equity mutual funds are suitable for long-term goals, like your children’s education. These funds have the potential for high returns due to their investment in stocks. With your moderate risk appetite, you can diversify across large-cap, mid-cap, and multi-cap funds. These funds leverage the power of compounding, which can significantly grow your wealth over time.

Debt Mutual Funds
Debt mutual funds are more stable and suitable for short-term goals or as a balance to your equity investments. They invest in fixed-income securities and provide regular income with lower risk compared to equity funds.

Hybrid Mutual Funds
Hybrid funds offer a mix of equity and debt, balancing growth and stability. These are good for investors looking for moderate risk with reasonable returns.

Increasing SIPs
Once your loan is repaid, consider increasing your SIP amount. Gradually increase your SIPs to Rs. 30,000-40,000 per month. This consistent investment will accumulate substantial wealth over the years.

Avoiding Direct Funds
While direct funds might seem cost-effective due to lower expense ratios, they require active management and financial expertise. Regular funds, managed through a Certified Financial Planner, provide professional guidance and active fund management. This can enhance your portfolio performance and align investments with your financial goals.

Children's Education Planning
Education costs are rising, and early planning is crucial.

Child Education Plan
Invest in child education plans offered by mutual funds. These funds are tailored for long-term growth and can help meet significant education expenses. Start with a mix of equity and hybrid funds to balance growth and stability.

Sukanya Samriddhi Yojana
For your daughter, consider the Sukanya Samriddhi Yojana, a government-backed scheme with attractive interest rates and tax benefits. Regular contributions can secure her future education and marriage expenses.

Retirement Planning
Even though retirement might seem distant, starting early ensures a comfortable future.

National Pension System (NPS)
The NPS is an excellent retirement planning tool with tax benefits. Allocate a fixed amount monthly towards NPS. The diversified investment in equity and debt under NPS ensures a balanced growth of your retirement corpus.

Mutual Funds for Retirement
Besides NPS, continue with mutual fund SIPs. Equity mutual funds, over a long horizon, can accumulate substantial wealth. The power of compounding works best with long-term investments, making your retirement corpus grow significantly.

Insurance Planning
Adequate insurance coverage is essential to protect your family’s financial future.

Term Insurance
Ensure you have a term insurance plan covering at least 10-15 times your annual income. This ensures your family’s financial stability in case of any unforeseen event.

Health Insurance
With rising medical costs, having comprehensive health insurance is vital. Ensure your health insurance covers your entire family, including your children. A Rs. 10-20 lakh cover should be adequate given current healthcare inflation.

Long-Term Wealth Creation
Systematic Investment Plans (SIPs)
SIPs are an excellent way to create long-term wealth. They provide the discipline of regular investing and benefit from rupee cost averaging. Increase your SIPs as your income grows and debts reduce. Focus on a diversified portfolio with a mix of equity, debt, and hybrid funds.

Avoiding Annuities
Annuities, while providing regular income, often come with high costs and lower returns compared to mutual funds. They also lack the flexibility and growth potential of mutual funds. Focus on building a robust mutual fund portfolio for better returns and flexibility.

Regular Review and Rebalancing
Financial planning is not a one-time activity. Regularly review your financial plan to ensure it aligns with your goals. Market conditions and personal circumstances change, necessitating adjustments.

Rebalancing Your Portfolio
Periodically rebalance your portfolio to maintain your desired asset allocation. This involves selling assets that have overperformed and buying those that have underperformed. This strategy ensures your portfolio remains aligned with your risk tolerance and financial goals.

Final Insights
Your financial journey is unique, and with disciplined planning, you can achieve your goals. Focus on paying off your debt, building an emergency fund, and investing systematically in mutual funds. Ensure adequate insurance coverage to protect your family’s future. Regularly review and adjust your financial plan to stay on track.

Remember, the power of compounding and disciplined investing can work wonders over time. Stay committed to your financial plan, and you will see your wealth grow, securing a bright future for your family.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8033 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 18, 2024

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I have 41yrs old and earning 1.8 lacs per month,, married 14years ago two kids one daughter Nd son,I have home loan,own flat and bought one flat by paid cash flat worth 75lac and another plot 30lacs have 5lacs health insurance,2cr term insurance How do I plan my financial plan please suggest me
Ans: Current Financial Overview
Age: 41 years
Monthly Income: Rs 1.8 lakhs
Family: Married with two children
Assets:
Own flat (home loan)
Flat worth Rs 75 lakhs (paid cash)
Plot worth Rs 30 lakhs
Insurance:
Health Insurance: Rs 5 lakhs
Term Insurance: Rs 2 crores
Appreciating Your Efforts
You have made good progress with property investments and securing your family's future with health and term insurance.

Financial Goals
Children’s Education and Marriage
Retirement Planning
Loan Repayment
Emergency Fund
Investment Strategy
Children's Education and Marriage
Systematic Investment Plans (SIPs):

Start SIPs in diversified mutual funds.
Allocate specific SIPs for education and marriage goals.
Recurring Deposits:

Open RDs for medium-term goals.
Ensure liquidity for urgent needs.
Retirement Planning
Public Provident Fund (PPF):

Maximize annual contribution to PPF for tax benefits and long-term savings.
National Pension System (NPS):

Invest in NPS for an additional retirement corpus and tax benefits.
Mutual Funds:

Invest in a mix of equity and debt funds.
Consider balanced advantage funds for stability and growth.
Loan Repayment
Home Loan:
Prioritize paying off the home loan.
Increase EMI payments if possible to reduce tenure and interest.
Emergency Fund
Maintain Liquidity:
Keep at least 6 months of expenses in a savings account or liquid fund.
Asset Allocation
Equity:

Invest 60% in diversified mutual funds.
Allocate towards large-cap, mid-cap, and small-cap funds.
Debt:

Invest 30% in PPF, NPS, and debt mutual funds.
Ensure stable returns with minimal risk.
Gold and Bonds:

Allocate 10% to gold bonds and other safe instruments.
Hedge against inflation and market volatility.
Insurance Review
Health Insurance:

Consider increasing coverage for comprehensive protection.
Include family members under the same plan.
Term Insurance:

Ensure the term insurance amount is adequate.
Review periodically to match with life stage changes.
Financial Discipline
Budgeting:

Track monthly expenses diligently.
Cut down on unnecessary expenditures.
Regular Review:

Review portfolio quarterly.
Rebalance based on performance and goals.
Final Insights
You are on a solid financial footing. Prioritize children’s future, retirement, and loan repayment. Ensure a balanced portfolio for growth and stability.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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Ramalingam

Ramalingam Kalirajan  |8033 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 04, 2025

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I am 37 years old with 75 lakhs in equity, 6 lakhs in bonds and 3 lakhs in emergency fund. I don't own a home . Living in rental house. Monthly salary is 1.5 lakhs with savings of 60k per month. Have three kids of 7 year and twins 1 years . How can I plan my financial situation.
Ans: Your financial situation is stable, and your savings rate is good. You have a strong base in equity and a small portion in bonds. Since you have three young children, long-term planning is critical. Below is a structured financial plan for you.

1. Understanding Your Current Financial Situation
Equity investments: Rs 75L

Bonds: Rs 6L

Emergency fund: Rs 3L

Monthly salary: Rs 1.5L

Monthly savings: Rs 60K

Living in a rental house

Three children: 7-year-old and 1-year-old twins

You have a good salary and savings rate. Your equity exposure is high, but bonds and emergency funds are low. You need to focus on asset allocation, risk management, and future expenses.

2. Setting Up a Strong Emergency Fund
Emergency funds should cover at least 12 months of expenses.

You currently have Rs 3L, which may not be enough.

Increase it to at least Rs 12L.

Keep it in a mix of liquid funds and bank FDs.

This will protect you from sudden financial shocks.

3. Asset Allocation for Stability
Your current portfolio is heavily tilted towards equity.

You need to balance risk by adding more bonds and fixed-income instruments.

Maintain at least 20-25% of your portfolio in debt.

Increase investments in bonds, debt funds, and other safe instruments.

This will provide stability during market downturns.

4. Future Education Expenses
Your children’s education will be a major expense.

Start a dedicated investment plan for their higher education.

Use a mix of equity mutual funds and debt funds.

Increase allocation as your income grows.

Avoid investment-linked insurance policies.

Planning now will reduce financial stress later.

5. Retirement Planning
You need a strong retirement corpus.

Continue investing in equity mutual funds for long-term growth.

Increase your SIPs every year.

Add some allocation to debt to reduce risk as you age.

Do not rely on real estate for retirement income.

Early planning will give you financial freedom.

6. Life and Health Insurance
With three children, life insurance is critical.

Get a term insurance plan with a high sum assured.

Avoid ULIPs and endowment policies.

Health insurance should cover all family members.

Get a super top-up policy for extra coverage.

Proper insurance will secure your family’s future.

7. Investing Your Monthly Savings
Rs 60K savings per month is good, but it should be structured well.

Allocate funds to equity, debt, and emergency reserves.

Increase equity investments through SIPs in actively managed funds.

Avoid index funds due to their rigid structure.

Invest in actively managed funds through a CFP-certified MFD.

A structured investment plan will maximize returns.

8. Planning for Children’s Marriage
Children’s weddings can be a large expense.

Start a dedicated investment for this goal.

Invest in balanced funds to reduce risk.

Increase allocation as the event gets closer.

Early planning will help you manage this cost easily.

9. Managing Rent vs. Buying a Home
You are currently living in a rental house.

Avoid emotional decisions when buying a home.

Consider renting if it is more cost-effective.

Focus on liquidity and flexibility.

This approach will help you maintain financial stability.

10. Tax Planning
Use tax-saving instruments efficiently.

Maximize deductions under Section 80C and 80D.

Invest in ELSS funds for tax benefits.

Avoid tax-inefficient investments like traditional insurance plans.

Proper tax planning will increase your net savings.

11. Periodic Review of Your Portfolio
Financial planning is not a one-time activity.

Review your portfolio every year.

Adjust asset allocation based on market conditions.

Consult a Certified Financial Planner for better insights.

Regular review will ensure you stay on track.

Finally
Your financial journey is strong, but improvements are needed. You must balance risk and plan for future expenses. Continue disciplined investing and review your plan regularly.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

..Read more

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Dr Upneet

Dr Upneet Kaur  |4 Answers  |Ask -

Marriage counsellor - Answered on Feb 26, 2025

Asked by Anonymous - Jan 18, 2025Hindi
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Relationship
I am in a relationship from past 2 yrs with a guy from the same caste. Initially when we just talked he asked me directly for marriage but only if our kundali matches. He asked me if I trust on kundali. I answered yes bcz I wasn't in love with him then. He told he too trusts on kundali. Months passed and once he proposed me I too accepted bcz till then we really liked each other. After 1.5 yrs his mother contacted my mother for marriage proposal. Our mothers didn't know anything about our relationship, they both know each other. I asked him that we should tell our parents about us. He said let them do as per they want when time comes we will tell them. I agreed upon this but our kundali didn't match so I told him that we should tell now. But now he is saying that the kundali isn't matching we can't marry. He's been very caring, understanding towards me. Also he tells me that the kundali is not matching something bad can happen so this marriage can't happen. Otherwise why would he reject a girl he loves. I really cannot cope with this. I'm crying day n night but he tells me that there's no use of crying breakup happens in everyone's life, we can keep the relationship till any of us get married after that we'll stay friends. I'm with u always. These lines of him are tearing me apart bcz I haven't seen him being this much practical, or he really doesn't care about me, about our relationship.
Ans: Hello mam,
I am sorry that you have to go through all this stuff. I do understand that in India, it is difficult to go along with auch kind of stuff. If the person whom you want to marry is not ready to take stand for you and go against the kundali system, then there is no fun in crying for him or waiting for him. Love relationships are always two sided. Now if he feela that break up is a normal thing for him, then I would suggest you that you should also move on. There is no compulsion that you think of marriage right now but rather you should go ahead with your studies and carrer. At the right time, you will find your right partner.
I hope this helps. Plz write to me regarding your education and what do you want to pursue further?
Waiting for your reply.
Take care
Regards
Dr Upneet kaur
Reach me: https://www.instagram.com/dr_upneet

...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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