Buying Your Home

Identify your needs
Determine your housing needs like space, infrastructure and amenities. While choosing a house consider factors like the size of your family, location of the house and its proximity to your workplace, schools, parks, shopping centres, and medical facilities. This will help you narrow down your choices.

Make a budget
Take into consideration five main costs — down payment, home loan repayments, closing costs like registration and stamp duty, property taxes and insurance, and maintenance and operating expenses – while making a budget for your house.

Manage your finances
If you are buying a home loan, your loan amount will depend on how much you can borrow and how much you can pay as down payment. It is important to save money by investing in RDs, balanced and debt funds for down payment 2-3 years beforehand. If you haven’t, you can tap your assets or liquidate investments with lower returns.

Avoid exhausting your funds
It is advisable to not dip into certain funds like – investments with high returns, provident fund, insurance policies, and emergency funds – for your home buying expenses. Also, make sure that you don’t vacuum-clean all your liquid funds from bank savings and fixed deposits.

Be prudent
Borrow not more than 45% of your net take-home pay, if you don’t have other loans. Apply for a loan jointly to maximise tax-breaks. Also, choose a home loan, its interest rate and tenure that suit your needs. Opt for a lender charging zero or the lowest prepayment penalty to reduce cost.

Raising Your Child

Here’s giving you an estimate of expenses that you should anticipate and plan for to meet your child’s requirements.

First 9 months
This stage will require an approximate budget of Rs. 50,000 to 80,000. It includes childbirth and post-natal care expenses like pregnancy test, Doctor visits, check-ups, ultrasounds, blood tests, medicines, baby books/classes, maternity clothes, delivery and hospital charges, post-natal medication and nursing charges, and others.

0 to 3 years
Since this stage marks your child’s first learning step, make sure you plan ahead well. Anticipate expenses within the bracket of Rs. 1.75 lakhs to 2.25 lakhs, which includes baby clothes, accessories, diapers, durables, food, books, toys, vaccines, medicines; Doctor’s fees; crèche and playschool fees, etc.

4 to 13 years
Off to school. Henceforth, your meter of costs starts ticking in thousands. Of course, all these costs would depend purely on each family’s outlook and financial status. You may choose to indulge your children with weekend dinners or order a pizza once a month. We suggest that you keep aside a minimum amount of Rs. 6 lakhs.

14 to 17 years
You will agree that this is the most stressful period for both parents and children due toacademic competition and peer pressure. Keeping in mind mainly the tutorial fees and lifestyle expenses, Rs. 3 lakhs is a fair figure.

18 to 22 years
There is a world of career options available for children to pursue these days, from international courses to the best Indian institutes, from off-beat courses to management degrees. That is why we recommend that you secure an approximate of Rs. 10 to 15 lakhs so that you can support your child’s dream.

Secure Your Child's Future

Have adequate insurance and funds
One of the biggest perils to your child’s well-being is your untimely death. So make sure that your life insurance is sufficient to provide for your child’s goals like higher education. Also, keep your money in a bank savings-cum-fixed deposit account so that cash is accessible during emergencies even as the investment earns interest.

Invest early
For long-term goals, you can either keep separate portfolios or one portfolio for all these investments. Open a PPF account in your child’s name to give them the same benefits as you. PPF can become the debt component of your portfolio. Invest in other options, especially in growth options like equity mutual funds and equities, to beat inflation and fund your child’s future easily.

Re-invest in debt and liquid options
As your goal comes within a 5-year period, move your higher-risk investments gradually into lower-risk options like debt funds to protect them from any erosion. Depending on your requirements, you can re-invest in liquid investment options like short-term fixed deposits and savings account-cum-fixed deposits so that the funds remain easily accessible and offer a regular income.

Make a will
A will is simply a legal expression of your asset allocation after your death that becomes the final word in succession for assets. Besides assets, you can state your wish about the guardianship of your children if you and your spouse were to expire. You should similarly assign the responsibility to a person for the execution of your will besides management of your estate till your children become majors.