A financial plan for young couples

I am 27 and employed with the Central government; my fiancé works in a PSU bank. I have been provided health cover by my employer. Please suggest a plan to help me meet my goals.

Mittal

It is heartening that you want to plan for your goals early on. Since all your goals, barring the one to buy a home, are for the long term, plan carefully. Budgeting can help you achieve your goals comfortably.

The most common mistake newly weds make is that they hurry into buying a home.

For instance, if you wish to buy property for ?30 lakh and avail a loan of ?25 lakh for 15 years, assuming interest of 9.85 per cent, your monthly EMI will be ?26,630. Even if your wife is eligible for a loan at 8 per cent, the EMI will be ?23,900. And you will end up having no surplus to spend on other things.

So, you could consider buying land in an upcoming area, which can be sold after five years to buy a flat. This will reduce your loan burden too.

It is too early to plan for children’s education. But, you can still make a long-term investment for, say, 15 years, the proceeds of which can be used for other purposes too.

Invest ?3,000 monthly in an instrument that can fetch 12 per cent annually; you will have ?15 lakh at the end of 15 years. You can follow asset allocation of 50 per cent in equity and debt to start with and can gradually increase equity portion. Buy a term cover for ?50 lakh each.