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Financial Planning: Malhar Majumder

Source : BUSINESS_STANDARD
Last Updated: Sun, Jan 20, 2013 19:44 hrs
A man walks past the HSBC logo at the bank's headquarters in Hong Kong

I am 35 and earn Rs 10 lakh a year. I plan to pursue an MBA in the next two years. I don’t have any liabilities by way of any kind of loans. I have savings of Rs 7 lakh in equity and debt mutual funds, bank fixed deposits and some cash in a savings bank account. How do you suggest I plan my financial kitty for the period I would study? The monthly expense of my family is roughly Rs 25,000.
Education is one of the best investments you can make, but you need to plan for it meticulously, if making this at your age.

There are two issues: One, the cost of your MBA programme, which is steep. If you are looking at an education loan to partly fund it, you need to scout the best terms available. Second, while studying, you should be free from any routine monetary issues. You mentioned your current monthly family expenses are around Rs 25,000. Ensure this amount corroborates to your actual expenses. For that you may draw an actual expense sheet for the next three months.

Further anticipate all contingencies requiring cash which might arise when you are at college. Once these two, that is, the regular budget schedule and contingency schedule are drawn, ensure enough cash to cover these, ideally in an easily accessible bank account.

Draw up the detailed schedule of expenses and explain these to your family, as to how much they should draw every month from the account. Also, ensure during these two years, your life policies and health policies remain active. With all these taken care of, I hope you have a great learning experience.

I got married two years ago. My husband and I want to buy a car next year, costing up to Rs 4 lakh. We would also like to start saving for our children over the next five-six years (target corpus = around Rs 7 lakh). Our household income is Rs 9 lakh a year. At the moment, we have investments worth Rs 3 lakh in fixed deposits. How do you suggest we plan for our goals?
You mentioned your income not your expenses. Consider the additional outgo in case you buy a car next year. Say if you take a car loan at 75 per cent of the value of the car, your equated monthly instalments would be around Rs 10,000 a month, plus petrol and maintenance cost of the car. The question is what would be your savings in that case. As for corpus of around Rs 7 lakh at today’s cost for your child, you may start investing around Rs 15,000 every month in a balanced mutual fund through a systematic investment plan/route (SIP) and continue this investment for the next five years.


The views expressed are the expert’s own. Send your queries to yourmoney@bsmail.in
Today, Malhar Majumder, director, Gliese Consulting, answers your questions




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