My husband annual salary is 7.5lakhs , i have already invested in SIP .. one is 1k SBi blue chip growth fund and another is 5k monthly fund name is parag Parikh flex cap fund..and also investment in life insurance of 1lakh yearly ... I have one son in 11th class science... How can i do money management properly ?
Ans: Your husband's annual salary is Rs. 7.5 lakhs. You have ongoing SIP investments:
Rs. 1,000 monthly in SBI Blue Chip Growth Fund
Rs. 5,000 monthly in Parag Parikh Flexi Cap Fund
You also have a life insurance policy with an annual premium of Rs. 1 lakh. You have one son in 11th grade studying science.
Financial Goals
Children's Education
Retirement Planning
Adequate Insurance Coverage
Current Investments
SBI Blue Chip Growth Fund: Rs. 1,000 per month
Parag Parikh Flexi Cap Fund: Rs. 5,000 per month
Life Insurance: Rs. 1 lakh per year
Monthly Savings and Budgeting
1. Emergency Fund:
Set aside an emergency fund. This should cover 6-12 months of expenses. Aim to save Rs. 3-5 lakhs. Start by saving Rs. 5,000 per month.
2. Children's Education:
Your son is in 11th grade, so higher education expenses are near. Allocate Rs. 10,000 per month to a dedicated education fund. Use child-specific mutual funds or a PPF account.
Investment Strategy
1. Surrender Investment-cum-Insurance Policy:
Surrender your current investment-cum-insurance policy. These policies often have lower returns and higher fees. Reinvest the surrender value into mutual funds for better growth potential. Mutual funds typically offer higher returns, better liquidity, and flexibility.
2. Public Provident Fund (PPF):
PPF offers tax benefits and guaranteed returns. It's a good long-term investment. Consider investing Rs. 5,000 per month.
3. National Pension System (NPS):
NPS helps build a retirement corpus. It offers tax benefits too. Invest Rs. 3,000 per month in NPS.
4. Continue with SIPs:
Your current SIPs are good choices. Continue investing in them. Increase your SIP amount in Parag Parikh Flexi Cap Fund to Rs. 7,000 per month.
5. Additional Mutual Funds:
Add a diversified debt fund to your portfolio. Invest Rs. 3,000 per month. This provides stability to your investments.
Risk Management
1. Diversification:
Diversify your investments. Spread them across different assets. This reduces risk and ensures stability.
2. Insurance:
Ensure adequate insurance coverage. You have a life insurance policy, which is good. Ensure you and your husband have health insurance.
Tax Planning
1. Tax-efficient Investments:
Invest in tax-saving instruments. PPF, NPS, and ELSS offer tax benefits. Plan your investments to reduce tax liability.
2. Tax-saving Strategies:
Utilise tax-saving strategies. Maximise benefits under Section 80C, 80D, and other sections.
Monitoring and Review
1. Regular Monitoring:
Monitor your investments regularly. Track performance and make necessary adjustments.
2. Annual Review:
Review your financial plan annually. Assess progress towards your goals. Adjust investments based on performance.
Final Insights
Focus on building an emergency fund. Surrender your investment-cum-insurance policy and reinvest in mutual funds. Increase your SIP in Parag Parikh Flexi Cap Fund. Start a dedicated fund for your son's education. Invest systematically in PPF, NPS, and diversified mutual funds. Diversify your portfolio and ensure adequate insurance coverage. Regular monitoring and annual reviews will help you stay on track. With disciplined planning, you can achieve your financial goals and secure your family's future.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
