Wedding Finance

Money Goals | Family Finances: Why Das Needs to Scale His Financial Goals

Varsha Das is only 26 years old and works in the IT sector in Kolkata, earning Rs 59,000 per month. His portfolio of Rs.27.08 lakh includes a house worth Rs.20 lakh, cash of Rs.1.7 lakh, equity worth Rs.2.38 lakh and debt under the form of Rs.2.2 lakh of EPF and Rs.80,000 of debt fund. . She has a gold loan of Rs.70,000 for which she is paying an EMI of Rs.3,000. His goals include building an emergency corpus, buying a house, saving for his marriage and retirement, and building a retirement corpus for his mother.

According to Fincart, Das would first have to repay the gold loan of 70,000 rupees from his cash. This will release Rs.3,000 for investment. Then, she is expected to build up an emergency corpus of Rs.2 lakh, which is equivalent to her six-month expenditure. For this, it can allocate cash of Rs.1 lakh and debt funds. For the shortfall, she can either save the surplus before she starts investing, or build up the corpus as she has sufficient funds. This amount should be invested in a low duration fund.

Das wants to get married in three years and estimated a need of Rs.9.5 lakh. She can allocate her equity fund corpus for the same and start a SIP of Rs.16,074 in a debt fund. For his mother’s retirement corpus in eight years, Das will need Rs.32.1 lakh and will need to invest Rs.21,342 in equity funds.

image-2

However, if there is no surplus, she can start with an SIP of Rs 5,000 and increase the amount after her income increases and her marriage goal is achieved. Das also wants to buy a house in four years, but due to lack of surplus, she would have to push back the goal to 10 years. For a house worth Rs.71.6 lakh, she can allocate her property, which will finance 50% of the amount. For the remaining sum, it can contract a loan and the IME can be financed by the increase in income.

picture-3

Das wants to retire at 50, but will have to postpone it for lack of surplus. Considering her current expenses and inflation, she will need Rs.4.4 crore and should allocate her PF corpus for the same. In addition, she will have to start a SIP of Rs 11,907 in equity funds after an increase in her income.

image-4

For life insurance, she has a term plan of Rs.50 lakh, for which she pays a monthly premium of Rs.512. According to the needs theory, she no longer needs coverage. For health insurance, she has Rs.5 lakh cover provided by her employer. Fincart suggests that he buy Rs.10 lakh plan and Rs.90 lakh add-on plan, which will cost him Rs.878 per month as a bonus.

Email us for expert advice

Are you looking for a professional to analyze your investment portfolio? Email us at [email protected] with “Family Finances” in the subject line. Our experts will study your portfolio and offer objective advice on where and how much you should invest to achieve your goals.