Family finance: Why this Assam-based couple needs to stagger their money goals to achieve them

Jinnatara Begum, 34, and Nazrul Islam, 50, are both salaried and live with their two children, aged 3 and 1, in their own house, in Assam. Their combined salary is Rs 70,432 a month and they have no liabilities. After household expenses, insurance premium, contribution to parents and kid’s education, they are left with a surplus of Rs 30,878.

Their goals include building an emergency corpus, buying land and taking a vacation, saving for their children’s education and weddings, and their retirement. Due to lack of surplus, Financial Planner Fincart suggests they put off some goals for now.

The couple can start by building an emergency corpus of Rs 1.98 lakh, which is equal to six months’ expenses, by allocating their cash and a portion of the recurring deposit to the goal. This should be invested in a liquid fund. Next, they want to save for their children’s education goals, which are 15 and 17 years away. For these, they will need Rs 62.6 lakh and Rs 75.8 lakh, respectively. For the former, they will have to start an SIP of Rs 13,165 in an equity fund for the specified time. For the latter, they can allocate their mutual funds and remaining portion of recurring deposit. Besides these, they will have to start an SIP of Rs 10,158 in an equity fund.


Portfolio

Cash flow

For the kids’ weddings in 24 and 25 years, they have estimated a need of Rs 40.4 lakh and Rs 42.9 lakh, respectively. For the former, they can allocate their gold investment and Sukanya Samriddhi scheme corpus, besides starting an SIP of Rs 2,517 in an equity fund. For the latter, they can start an SIP of Rs 2,521 in an equity fund. However, due to lack of surplus, they will have to put off these goals till a rise in income. They will also have to put off their goals of vacation and buying land for now. Finally, for retirement in 26 years, they will need Rs 4.5 crore, and can allocate their EPF corpus to this goal. They will also have to start an SIP of Rs 9,312 in an equity fund, but due to lack of surplus, they can start with Rs 9,000 for now.
How to invest for goals

Insurance portfolio

For life insurance, the couple has two postal plans of Rs 5 lakh each, for which they are paying a premium of Rs 354 a month. Fincart suggests they continue with these plans, but Jinnatara should also buy a Rs 50 lakh term plan at the cost of Rs 1,754. For health insurance, they should buy a base plan of Rs 5 lakh and a top-up plan of Rs 45 lakh, which together will cost them Rs 2,849 a month in premium.

Financial plan by FINCART

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