Your Financial Plan

My fiancé and I (both 28) are government employees, covered under the New Pension Scheme and under employers’ medical facility. Our incomes are compact. I want to plan well before our marriage. Can I buy a flat immediately after marriage or should I wait for government accommodation till 2022?

Shiv Gupta

It is heartening to see a youngster have a long-term financial view before marriage. It is better to avoid long-term liability at the beginning. Since you are eligible for quarters, try and rent out till such time. Moreover, the life of flats is 40-45 years. By the time you turn 70, the flat could be up for redevelopment and you may have to move out of your own house. So, avoid buying a flat. Instead, plan to buy land with the available surplus in an upcoming place for better appreciation over 10-15 years.

If you take a loan of ₹6 lakh for five years to buy a car at an interest of 10 per cent, your EMI will be ₹12,800. This will account for about half your surplus. Restrict the car value to ₹4 lakh.Take a loan of ₹3.5 lakh, your EMI will be ₹7,500.

For children’s primary education save ₹5,000 per month. It should earn 12 per cent return to get ₹4.1 lakh in five years.

Many aspire for overseas holidays, but with limited surplus, plan vacations within India. Allocate ₹5,000 per month for this.

Since retirement is quite some time away, a small saving every month will help you build a good retirement corpus. A ₹5,000 investment per month for 30 years with a 12 per cent return can accumulate ₹1.75 crore. Along with the NPS accumulation, a major part of the retirement corpus can be met.

With all the four goals, your monthly savings will be ₹22,500. The balance can meet car fuel and other expenses.

From your savings account, set aside ₹1 lakh as emergency fund, utilise the rest to buy a plot of land.

The writer is financial planner and founder,

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