I am about to get married. I earn Rs 40,000 per month and my would-be-wife earns Rs 30,000. While planning our finances together, what are the things we need to keep in mind? Both of us have commitments towards monthly investments in two mutual fund schemes each and two annual payments towards life insurance.
As far as finance is concerned, the ultra important thing the two of you need to do together is to sit and draw up a monthly budget. This will offer you a clear picture of all your commitments. The next challenge is to see whether you are sticking to your budget. Monitor this for at least six months before taking the next step.
I (55) had bought a shop in Kandivali, Mumbai, eight years back. I earn Rs 11,000 a month as rent. My son wants to study abroad and I will need Rs 30 lakh for the two-year course. My investment in PPF is Rs 15 lakh and in stocks is Rs 8-10 lakh. Should I liquidate my investments or sell the shop?
First of all you have not mentioned the current market value of your shop. Secondly, you have not mentioned your current income and corresponding expenses. In absence of these two data, we have to make certain assumptions like you are not dependent on the rental earnings from the shop. Ideally you may check with few banks, how much loan, you may get against your future rent receivable. Also, you can take an education loan which your son may repay in future and get tax benefit. If there is still a gap, then only consider selling a part of your investments in stocks and redeeming a part of your PPF.
I am 32, married and have a four-year old son. I run a travel agency (six-month old). The business will take another 18 months to break even. I take home Rs 60,000 a month. After all my expenses, I am left with Rs 10,000. I have a life insurance of Rs 15 lakh and Rs 8 lakh in PPF. My wife’s investment in two mutual fund schemes is worth Rs 1 lakh each. How should I save for my son and my family?
Right now your capacity to invest outside your business is limited to Rs 10,000. It is recommended that you invest this amount in a good balanced mutual fund for long-term via the systematic route or SIP. As your cash flow increases, you may have to invest a larger amount in future to make provisions for your child’s education and to safeguard your family’s future in a diversified equity based mutual fund.
The writer is Director, Gliese Consulting
