Maintaining a family is not an easy task, as most would have it. This is especially when it comes to finances. Having a proper financial plan is necessary for any family to come through as a progressive entity. Nilesh Kawathekar who is a health practitioner, and his wife Ashwini who lectures at the university, stay in their private home in a small town known as Thane. Their combined income stands at Rs 1.8 lakh and an additional of Rs 17,000 of rental investment. The investment is a building they set up as apartments for the primary purpose of investing. After deducting expenses around the house, home loans, and insurance premiums, they are still left with Rs 78,542. All this money is left unaccounted. The family prospects the surplus to cater for their other needs that may arise during the month. Also, the savings go to emergencies, future child education, purchase of a car and a house and early retirement.
They approached a financial advisor who guided them through the ups and downs of handling family finances. Pankaaj Maalde, a financial planner, advised the couple to set an emergency fund of about Rs 3.54 lakh. The amount is equal to a three-month expense in cash. They were advised to further invest the cash in an ultra-short-term fund. Apart from saving for emergencies, they set out to by another house worth Rs 84 lakh. It is a plan that is stipulated to last five years. They are planning to sell their current home at a price of Rs 35 lakh, which would be part of the financial sources for the purchase. In financial terms, the particular house is to be bought in installments after paying a down payment of Rs 19.6 lakh.
This would later to be supported by a SIP of Rs 25,000 in equal instalments for the next three years. After the payments, the contract would be reviewed due to the change of the market demands. Furthermore, the remaining cost shall be covered by taking up a loan of Rs 29.4 lakh. To their future child’s education, the couple would want to use up to Rs 67.5 lakh for 19 years. For this dream to come true, they need to start a SIP of Rs 10,000 in an equity fund. In their retirement plans, they require a total sum of Rs 10 crore in a time span of 23 years as the couple wants to retire at the age of 55 years. The couple continues to get life insurance among other covers.