I am 31 earning 99K per month with monthly SIP of 7k +insurance premium 2.5k i am sole earner in my family and family of 3 .Car loan EMI of 18 k 6 years left .savings in gold is 10 lakhs Mutual fund is of 5 lakh kindly guide how much additional SIP should i have to do as i think i am not going in right direction . My goal is to purchase a house worth rs. 1cr. Maximum but next year and want to close my CAR loan ASAP too
Ans: You have done well in building some savings and SIPs. Let’s now look at your goals and finances closely.
As a Certified Financial Planner, I will now guide you step-by-step. The goal is to show you a clear path.
This plan will help you buy your house, repay your car loan, and build strong financial health.
Understanding Your Present Situation
You are 31 years old. That is a good age to start disciplined planning.
You earn Rs. 99,000 per month. That is a decent monthly income.
You have a family of 3. You are the only earning member.
Your car EMI is Rs. 18,000. You have 6 more years to pay.
You invest Rs. 7,000 monthly in SIP. That is a good beginning.
Your insurance premium is Rs. 2,500 per month. That is acceptable if it is for pure term life cover.
You have Rs. 10 lakhs in gold. That is high exposure for gold.
You have Rs. 5 lakhs in mutual funds. That is a good step.
You want to buy a house worth Rs. 1 crore next year. That is a very big goal in short time.
You also want to close the car loan early. That is a good mindset.
Key Issues That Need Attention
Your EMIs are high compared to your income.
You are saving less monthly. Your total monthly savings is just Rs. 9,500.
You want to make a big purchase (house) very soon. But not enough cash flow is available.
Gold savings are not liquid and returns are not consistent.
You have pressure of responsibilities as the sole earner. Hence, emergency backup is very important.
First Focus: Emergency Fund
You should have at least 6 months of your expenses saved.
For you, Rs. 3.5 to 4 lakhs should be kept aside as emergency fund.
Do not keep this in gold. Keep this in liquid funds or sweep-in fixed deposits.
This amount should not be used for any other goal.
Review Insurance Coverage
Check if your Rs. 2,500 per month insurance is for pure term plan.
If it is not term plan, then it is not serving your goal.
If it is ULIP or endowment or money back, surrender and reinvest in mutual funds.
You need Rs. 50 lakhs to Rs. 75 lakhs term cover. This is minimum for your current life stage.
Buying the House – Think Twice Before You Rush
You are planning to buy a Rs. 1 crore house in 1 year.
Right now, your cash flow does not support this safely.
Even if you take 80% home loan (Rs. 80 lakhs), EMI will be around Rs. 60,000.
Add your current car EMI (Rs. 18,000). Total EMI = Rs. 78,000 per month.
Your income is Rs. 99,000. So, after EMIs, you will be left with Rs. 21,000 only.
You still have to manage family expenses, SIPs, insurance, lifestyle from this.
This is not practical. It will create financial stress and imbalance.
You should delay house purchase by 2–3 years.
First, build higher down payment and reduce EMI burden.
Till then, increase SIP and build a house fund.
You should target to build at least Rs. 20 lakhs in mutual funds before house purchase.
Car Loan – Plan for Early Closure in a Balanced Way
Your car EMI is Rs. 18,000 per month.
Loan has 6 years left. So, this is a long commitment.
Closing this early will improve your cash flow.
But don't use all savings at once to close this.
Instead, create a parallel SIP or RD of Rs. 10,000 monthly for 12–18 months.
After that, use this amount to close part or full car loan.
This will be a smart and stress-free approach.
Do not break mutual fund or gold savings for car loan.
Your Monthly Budget – How to Optimise
Income: Rs. 99,000
Car EMI: Rs. 18,000
Insurance Premium: Rs. 2,500
SIP: Rs. 7,000
Remaining: Rs. 71,500
Family Expenses: Estimate Rs. 50,000 to 55,000
Balance available: Rs. 15,000 to 20,000
You can add Rs. 10,000 more to SIP from this amount.
You can use Rs. 5,000 to Rs. 10,000 for car loan closure fund.
This will bring total SIP to Rs. 17,000.
This is more aligned to your income level.
Ideal SIP Target Based on Income
You should aim to save 30% of your monthly income.
For you, that is around Rs. 30,000 monthly.
Right now, you are at Rs. 7,000 SIP.
After adjustment, increase this to Rs. 17,000 for now.
Over the next 12 months, try to reach Rs. 25,000 monthly SIP.
Use step-up SIP option to increase SIP every year by 10–15%.
This method works well over 5–7 years.
Your goal of house purchase in 2–3 years and financial strength both will benefit.
Gold Savings – Restructure It Properly
You have Rs. 10 lakhs in gold. This is too high.
Ideally, gold should be only 5–10% of your total portfolio.
It is not productive for house purchase or emergencies.
Start switching gold slowly into mutual fund SIPs.
Do not sell all at once. Sell in small amounts over 6–12 months.
This will also help in tax efficiency.
Mutual Fund Portfolio – Keep It Focused
You already have Rs. 5 lakh in mutual funds.
Continue these investments. Monitor growth and performance once in 6 months.
Choose actively managed funds for your SIP.
Avoid index funds. They copy index and lack flexibility in correction periods.
Actively managed funds have better human research and decision making.
Avoid direct plans if not experienced.
Regular plans through Mutual Fund Distributor with CFP credential offer guidance.
This support is helpful when markets are volatile or when rebalancing is needed.
Tax-Saving and Goal Linkage
If you invest more in mutual funds, also use ELSS category.
These will give you 80C benefit and long-term wealth building.
Use short-term funds or liquid funds only for emergency fund and car loan targets.
For house goal (2–3 years away), use hybrid aggressive funds or short duration funds.
Equity mutual funds are suitable only for goals 5 years or more away.
Short term capital gains on equity mutual funds is taxed at 20%.
Long term capital gains above Rs. 1.25 lakhs is taxed at 12.5%.
For debt funds, all gains are taxed as per your tax slab.
Family Protection – Essential Planning
As sole earner, your family depends on you completely.
You must have a valid term life insurance policy.
Add personal accident cover also. Premium is low. Coverage is important.
Add family floater health insurance for Rs. 5 to 10 lakhs.
This keeps savings safe in medical emergencies.
Do not depend only on employer health cover.
Long-Term Wealth Building – Have a 10-Year View
You are still young. You have time to build strong wealth.
Start focusing on Rs. 25,000 to Rs. 30,000 monthly SIP over next 2 years.
Build Rs. 40 to 50 lakh wealth in 10 years through disciplined SIP.
Avoid big purchases like house if they break this flow.
Let your goals be realistic. Let your money work for you.
Mistakes to Avoid
Rushing into home loan without strong cash flow.
Keeping too much in gold and not enough in financial assets.
Not having proper term and health insurance.
Underestimating emergency fund importance.
Following random investment tips without personalised plan.
Finally
You are doing some things right already. Appreciate your efforts so far.
Now you need a sharper and more balanced plan.
Delay house purchase till your cash flow improves.
Close car loan smartly with separate fund.
Increase SIP steadily. Use mutual funds with active management.
Build protection with right insurance and emergency fund.
This 360-degree view will help you become financially stronger and stress-free.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Question by kamal on Jan 10, 2023Hindi
