Family Finance: Ahmedabad-based Manjras will have to put off some goals

Samir, 34, and Kajal Manjra, 31, live in Ahmedabad and together bring in a salary of Rs 66,000 a month. They live in their own house with their two kids, aged six and one. After expenses (Rs 28,000) and investment (Rs 20,167), they are left with a surplus of Rs 6,237 every month.

Their goals include saving for contingencies, kids’ education and weddings, a car, annual vacations and retirement. They will have to forgo the goals of kids’ weddings and car for now due to lack of surplus.

The financial planning team of Fincart suggests that they build the emergency corpus of Rs 2 lakh by allocating their cash, fixed deposit and recurring deposit.

MANJRAS’ PORTFOLIO



CASH FLOW



For the daughter’s education expense of Rs 33 lakh in 12 years, they should start an SIP of Rs 3,646 in an equity fund and also assign their stocks, mutual funds and remaining FD. For the son’s education in 17 years, they will need Rs 51 lakh and can allocate two insurance plans. Besides this, they should start an SIP of Rs 3,326 in an equity fund.


HOW TO INVEST FOR GOALS
* Investment for vacation will start after the car loan EMI ends in nine months. Investment includes Rs 667 in Atal Pension Yojana. Annual return assumed to be 12% for equity, 8% for debt. Inflation assumed to be 7%. All SIPs should be increased by 8% every year.

For retirement, the couple will need Rs 6.6 crore in 26 years. For this, Fincart has assigned their EPF corpus and Atal pension scheme. For the remaining amount, they will have to begin an SIP of Rs 15,345 in an equity fund. All these SIP investments will need to be increased by 8% every year for the goals to be achieved.
INSURANCE PORTFOLIO

Premiums are indicative and could vary for different insurers.

The investment for vacation (SIP of Rs 5,594) can begin after nine months when the car loan EMI has ended. Though Samir has bought term plans worth Rs 1 crore, he is advised to pick up another Rs 1 crore of term plan along with a Rs 20 lakh critical illness plan. He should surrender both his traditional plans. For health insurance, he has a Rs 2 lakh cover provided by his employer and has bought his own Rs 5 lakh cover. Fincart suggests he pick up another Rs 5 lakh of cover. The premium can be covered from the surplus.


(Financial plan by FINCART)


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