Mumbai: Financial planning is something that affects everyone. With the Budget and tax filing round the corner, there are many who are spending sleepless nights.
CNN-IBN profiles a young middle-income couple from Mumbai, and does some hard number crunching to help them plan their finances better.
Jose and Anjali Benjamin are a newly married couple, who are coming to grips with life while on the move. Jose works for a reputed BPO in Mumbai while Anjali works for a school.
For the Benjamins, life has been smooth till now. They have comfortable jobs and stay in a peaceful flat in the Mumbai suburbs. A perfect double-income couple with no major responsibilities.
But one look at their finances and their youth shows through when it comes to managing their surplus income.
The Benjamins make about Rs 3,12,000 a year, which works up to Rs 26,000 a month.
Their expenses include house rent (Rs 4,500), personal loan (EMI Rs 2,585) and food (Rs 4,500) as well as other expenses like transportation (Rs 1,000), personal care (Rs 500), medical expenses (Rs 100), vehicle maintenance and repairs (Rs 100) and other miscellaneous expenses (Rs 2,500), adding up to almost Rs 15,785 a month.
This way, the surplus per month works up to Rs 10,215
As far as investments go, they have only a fixed deposit of Rs 50,000 and LIC's Jeevan Nidhi pension plan worth Rs 2,55,000.
"At times, I get a little scared. In relation to our income, how much can I invest? But as my income goes up, I can invest more. I am hoping that as my income goes up, I will invest more to be on the safer side," reveals Jose Benjamin.
Professional advice was the need of the hour. And independent financial planner Gaurav Mashruwala was roped in to help manage their finances. After going through Benjamins' budget, he came up with a comprehensive financial management plan.
He suggested a contingency fund, equaling three months' expenses (Rs 15,785 x 3=Rs 47,355) as a must. This should be set aside as soon as possible. Also a mediclaim of Rs 2 lakh each.
Apart from that, a term insurance of Rs 10 lakh each is also part of the plan. And their relative youth allows them to make aggressive investments, of which 80% should be in equity and 20% in debt.
Says Gaurav Mashruwala, financial planner: "Age is on their side, double-income family. They should look at higher equity component, Because even if there is a downfall, because of double income, they will be able to withstand more losses. But in the long run, they will gain. So look at contingency, health insurance, disability life insurance, protect the property and look at retirement."
But like every woman, Anjali has an eye on the Budget and hopes for some check on the spiralling prices of onions and cooking gas.
Says Anjali Jose Benjamin: "I hope the budget does not spoil our plans. They should do something about the rising onion prices, something which affects the poor people the most. Also, cooking gas prices, the inflation has to be kept in check."
But Jose and Anjali look much happier after Gaurav's dose of investment advice. Dreams look a little more attainable now and financial planning seems a little easier to understand.
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