Financial Planning

Financial Planning (32)

1. How much emergency/contingency fund?

Emergency or Contingency Fund is required to meet any emergency e.g sudden loss of income, loss of job, medical emergency etc. Thumb rule says one should keep 3 to 6 month’s expenses in an emergency fund. In case of government employee, one should keep 3 month’s expenses but in case of self employed professionals or private sector employees; one should keep 6 month’s expenses in an emergency fund. For retirees, emergency fund should be equal to 1 year’s expense.

Mr. Kunal is 35 years old and married with a 5 year old daughter.Mr Kunal is  staying in Andheri in a rented house. He has taken a home loan from ICICI bank and also has a vehicle loan. He is paying 40% of his income towards his home loan EMI and 10% of income for his vehicle loan EMI. Due to declining sales by the Company, his employer has enforced 5% pay cut from all the employees. Further his daughter’s kid school fees have doubled recently. Adding to these ,high inflation   has affected the family budget. He has not been able to save anything for contingency purpose. Both Mr Kunal and his wife are at a loss about they should do?

These are uncertain times of high inflation and rising cost of living; Financial Planning helps one to find answers on many financial challenges. The Financial Planning services are best secured from a fee-only Certified Financial Planner or SEBI Registered Investment Advisor who provides unbiased advice independent of product sales. 

 If you pay fees for financial planning, what do you get in return? Will you be able to recover the value of the fee that you are paying?

There are various milestones which we achieve in our lifetime. Each of these brings some changes in our priorities and financial requirements. To accommodate these changes and to move ahead to achieve the goals we have identified, one has to prepare well. Sometimes the change may require a big financial support or financial planning to proceed further in our life. Here are some of the milestones which we will have to go through and we should be well prepared to accommodate them without affecting our financial well-being:  

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