I am 40 year old. I have a salary of 65000 rs. My wife takes care of the house, my parents and our 1.8 year old daughter. I live in a rented property. I am want to buy a property in gurgaon which is suitable for whole family. I have sold a property I pre-owned in gurgaon in 3300000. But now as property rates are on hike am not able to search for a suitable property. Help me search a property and plan my daughter's future as well.

Ans: It sounds like you're facing a challenging situation with various factors to consider. Here are a few suggestions:

Consider prioritizing your health and well-being: A 4.5-hour daily commute can take a toll on your physical and mental health, especially considering your age and family responsibilities.

Evaluate your financial situation carefully: Compare the costs of living in Ghaziabad versus Gurgaon, including rent, school fees, and daily expenses. Look for ways to optimize your budget and potentially increase your income through avenues like investments or additional sources of revenue.

Explore alternative living arrangements: Look for more affordable housing options closer to your workplace in Gurgaon or explore the possibility of telecommuting if your job allows it.

Seek professional guidance: Consider consulting with a financial advisor or counselor who can help you assess your options objectively and make informed decisions based on your priorities and financial situation.

Ultimately, prioritize your health, family well-being, and financial stability when making your decision. It may require some careful planning and adjustments, but finding the right balance is crucial for your overall happiness and success.

Ans: Here's some guidance on your ideal budget for a property in Gurgaon:

Financial Strength:

Combined Income: Rs. 2.5 lacs per month is a good starting point.
Savings: Rs. 1.5 cr (Rs. 1 cr in MF + Rs. 50 lacs in Stocks) is a significant sum.
Investments: Rs. 1 lac monthly SIP shows strong saving habits.
Challenges:

Dependent Child: Having a child with Cerebral Palsy will require long-term financial planning for their care.
Monthly Expenses: Your current expenses are Rs. 1.35 lacs (including rent).
Considering these factors:

Don't stretch too thin: While you have a good income and savings, prioritize your child's needs and future medical care.
Target a 15-20 year loan term: This keeps your monthly EMI manageable.
Recommended Budget:

Focus on affordability: Aim for a property with a total cost (including registration and other charges) between Rs. 50 lacs - Rs. 1 crore. This translates to a monthly EMI of around Rs. 30,000 - Rs. 60,000 (assuming a 15-20 year loan term).
Location: Consider areas in Gurgaon with good healthcare facilities and accessibility for your child's needs. Explore areas like Sectors 56, 70, 84 or Gurgaon outskirts like Sohna or New Palam Vihar which may offer better affordability.
Additional Tips:

Talk to a Financial Advisor: Discuss your situation with a Certified Financial Planner (CFP) to create a personalized financial plan considering your child's needs and future goals.
Research Property Options: Look for resale flats, builder floors, or upcoming projects in your budget range. Use online portals like MagicBricks or NoBroker to get an idea of prevailing prices.
Factor in Additional Costs: Remember, there are additional costs besides the property price – registration charges, stamp duty, maintenance fees, etc.
Best Regards,

K. Ramalingam, MBA, CFP,


Chief Financial Planner,


www.holisticinvestment.in

Ans: Investing wisely is essential for securing your family's financial future. You have significant savings and a steady income, and you want to ensure a prosperous future for your child. Given the high property prices in Gurugram, it's crucial to evaluate whether investing in real estate is the best option. We will also explore how to budget your expenses effectively.

Evaluating Real Estate Investment
Rising Property Prices
Property prices in Gurugram have indeed skyrocketed. Investing in real estate requires careful consideration of several factors, including the market trends, your financial stability, and future needs.

Market Trends
Gurugram's real estate market has seen significant growth. While this might suggest potential for appreciation, it also means high initial costs and potential volatility.

Financial Stability
You have substantial savings and a combined income of ?3.5 lakhs per month. This financial stability is beneficial, but investing a large sum in property might limit your liquidity.

Alternatives to Real Estate
Instead of locking a significant portion of your funds in property, consider diversified investments. This approach can offer growth potential with managed risk.

Mutual Funds
Investing in mutual funds, especially actively managed ones, can provide good returns. These funds allow for professional management and diversification across various sectors.

Equity Funds
Equity funds, particularly large and mid-cap funds, can offer substantial growth. These funds invest in established companies, providing a balance of risk and return.

Financial Impact of Buying Property
Initial Costs
Buying property involves a substantial initial investment. This includes down payment, registration fees, and other related expenses.

Ongoing Costs
Maintenance, property tax, and potential loan EMIs add to the financial burden. It's essential to consider if these costs align with your long-term financial goals.

Securing Your Child’s Future
Education Planning
Planning for your child's education is crucial. Education costs are rising, and starting early can help in accumulating the necessary funds.

Education Savings Plans
Consider investing in education savings plans that offer tax benefits and growth potential.

Systematic Investment Plans (SIPs)
SIPs in mutual funds can help accumulate wealth systematically over time. By investing a fixed amount regularly, you can benefit from rupee cost averaging and compounding.

Health and Insurance
Ensuring adequate health and life insurance is vital. It protects your family against unforeseen expenses and provides financial security.

Health Insurance
A comprehensive health insurance plan covers medical expenses, ensuring you don’t have to dip into savings during health emergencies.

Life Insurance
Adequate life insurance ensures your family’s financial stability in case of any unfortunate event. Consider a term insurance plan for high coverage at a lower cost.

Effective Budgeting
Monthly Income and Expenses
With a combined monthly income of ?3.5 lakhs and a rent expense of ?53,000, it’s important to allocate your funds wisely.

Fixed Expenses
Fixed expenses include rent, utilities, and insurance premiums. Ensure these are covered first from your monthly income.

Variable Expenses
Variable expenses include groceries, transportation, and entertainment. Tracking these helps in identifying areas where you can save.

Savings and Investments
Allocating a portion of your income to savings and investments is crucial for financial growth and security.

Emergency Fund
Maintain an emergency fund covering 6-12 months of living expenses. This fund provides a safety net during unforeseen situations.

Investment Portfolio
Diversify your investment portfolio across various asset classes to balance risk and return. This includes equities, mutual funds, PPF, and NPS.

Debt Management
If you have any existing loans, prioritizing repayment is essential. Reducing debt improves your financial health and increases disposable income for investments.

Long-Term Financial Planning
Retirement Planning
Start planning for retirement early to ensure a comfortable and secure future.

NPS and PPF
Continue contributing to your NPS and PPF accounts. These offer tax benefits and long-term growth, essential for retirement corpus.

Mutual Funds
Investing in mutual funds can provide the necessary growth to build a substantial retirement corpus.

Estate Planning
Ensure your assets are managed and distributed according to your wishes through proper estate planning.

Will and Trust
Create a will to specify how your assets should be distributed. Consider setting up a trust for smooth and tax-efficient transfer of wealth.

Legal Consultation
Consult a legal expert to ensure all estate planning documents are in order and comply with legal requirements.

Conclusion
Investing in real estate in Gurugram requires careful consideration due to high property prices and potential financial constraints. Diversifying your investments across mutual funds, equities, and other financial instruments can provide better growth and liquidity. Planning for your child’s education, health insurance, and retirement are crucial steps towards securing your family’s future. Effective budgeting and debt management will further strengthen your financial position. Consulting a Certified Financial Planner can provide personalized advice to optimize your financial strategy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Understanding Your Current Financial Position

You both earn Rs. 1.80 lakh monthly. This is a good income.

You live in a leased house in Bangalore. So, you save on rent payments.

You currently have no savings. That is risky and must be addressed first.

You had credit card settlements earlier. This has lowered your CIBIL score.

Your loan was rejected due to poor credit history. This is expected after settlements.

Your wife has lower income. So, combined loan eligibility is affected.

You want to buy a property in Bangalore. But don’t know what to buy yet.

Issues with Current Financial Health

Low or zero savings is risky. No buffer for job loss or emergency.

Poor credit score affects loan approvals. Also increases interest rates when approved.

Planning a property purchase without savings is not safe.

Property cost in Bangalore is high. You will need good credit and savings.

Unclear property choice shows lack of clarity in goal.

Let’s Fix the Basics First

Forget property buying for now. It’s not a priority today.

Build a strong financial base first.

First step is to build an emergency fund. Minimum 6 months expenses.

Try to save Rs. 50,000 monthly. This is around 28% of your income.

Out of that, keep Rs. 25,000 aside as emergency savings.

Put emergency fund in liquid mutual fund or short-term FD.

Use balance Rs. 25,000 to start investing for long term goals.

This way you start wealth creation and stay safe from sudden shocks.

Steps to Improve Your CIBIL Score

Check your current CIBIL report. Spot all negative remarks.

Start using one small credit card. Repay full amount every month.

Don’t delay even by one day. It will hurt your score again.

Don’t apply for any loan for 12-18 months.

Credit score improves only with time and discipline.

Pay mobile, electricity, rent and other bills on time.

Avoid financial shortcuts like new settlements or informal loans.

Make your bank accounts active with consistent transactions.

Keep credit utilisation ratio below 30%.

Why Property Buying Now is Not Wise

Real estate has high entry cost and exit cost.

Down payment will need minimum 15%-20%. That is at least Rs. 15-20 lakh.

Home loan needs high credit score. Else interest rate will be very high.

Property is not liquid. You can’t sell quickly when needed.

Property maintenance and tax cost is extra burden.

You don’t own a house yet. But that doesn’t mean you must rush.

Many people regret hasty property purchases later.

Renting is not bad. It gives flexibility and no long-term burden.

Invest first. Build credit and corpus. Buy property only after 5 years.

How to Prioritise Financial Goals

Step 1: Emergency Fund – Minimum Rs. 5 to 6 lakh in liquid investments.

Step 2: Credit Repair – Maintain discipline and no new settlements.

Step 3: Wealth Creation – Start SIPs in mutual funds.

Step 4: Term Insurance – Buy pure term cover for both of you.

Step 5: Health Insurance – Take separate health policy if only employer cover exists.

Step 6: Review After 3 Years – Only then think of home purchase.

How to Start Investments Now

Start mutual fund SIPs for long term goals like retirement and child’s education.

Begin with Rs. 20,000 per month SIP. Increase by 10% yearly.

Always invest in regular mutual funds through a certified financial planner.

Regular funds give guidance, reviews and behavioural support.

Direct funds give no advice. Many investors take wrong decisions due to that.

Certified Financial Planner will help in selecting right funds.

Also helps in goal tracking, tax planning and risk assessment.

Avoid index funds. They blindly copy markets and don’t protect during falls.

Actively managed funds adapt to changes and protect capital better.

Create Goal-wise Investment Buckets

Goal 1: Emergency Fund – Rs. 6 lakh in 12 months. Use liquid funds.

Goal 2: Short-Term – Next 3 years, invest in hybrid or conservative funds.

Goal 3: Long-Term – SIP in equity mutual funds for retirement and future goals.

Goal 4: Property – Start separate SIP for this, after 3 years only.

Wife’s Role in Financial Planning

Include her in all planning steps. Take decisions jointly.

If she is not financially aware, help her understand the basics.

Make her take a small SIP in her name. This builds interest and ownership.

Encourage her to open her own credit card. Use it responsibly to build her score.

Her credit score and income will help in future joint loans.

Her health and life cover are also important. Don’t ignore.

Mistakes to Avoid from Now

Don’t rush into property buying because others are doing it.

Don’t take help from informal lenders or brokers.

Don’t co-sign for any relative’s loans.

Don’t buy real estate as an investment.

Don’t invest in traditional LIC or ULIP plans.

Don’t mix insurance and investment.

Don’t blindly trust online credit repair companies.

Don’t invest without written goal plan.

Timeline to Prepare for Property

Year 1: Create emergency fund. Improve credit score. Avoid any new debt.

Year 2: Continue SIPs. Track expenses. Maintain discipline.

Year 3: Take CIBIL report again. Score should be 750+.

Year 4: Assess financial readiness. Check if property goal is now practical.

Year 5: If all is good, shortlist location. Start planning down payment.

If You Still Want to Buy Early

Then take 2 years to build Rs. 10-15 lakh corpus.

Buy a small plot or property without loan. Only if budget allows.

Avoid joint loans if wife’s income is too low.

Don’t stretch EMI above 30% of your income.

But again, only do this if you have emergency fund and stable credit.

Finally

Your income is good. But financial base is weak today.

First focus must be on savings and discipline.

Property will always be available. But your credit and savings need time.

Use this time to grow slowly and wisely.

A certified financial planner can help you set up proper goal-based plans.

Your past does not stop you. But only discipline will build your future.

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