By Jai Adiani
Rahul Ahuja, 28, and Deepika Ahuja, 27, are Double-Income-No-Kids couple. Rahul, who works with leading IT Company, makes Rs 7 lakh per annum, while Deepika makes Rs 4.5 lakh per annum. Their take home is Rs 95,000 per month after taxes.
Their expenses are as follows:
Rent of Rs 35,000 per month, Rs 12,000 per month EMI towards car loan for the two hatchbacks they own. Household expenses are Rs 30,000 per month. The total outflow is Rs 77,000 per month, which leaves them with Rs 18,000 per month towards savings.
The couple had an accumulated EPF balance of Rs 3 lakh and Rs 1.75 lakh respectively. Their parents are financially independent staying in their respective hometowns. They are now looking at streamlining their personal finances and save up for their future goals, which are:
- Start a family in 4 years time
- Deepika would take a career break
- Buy a 2 BHK flat in Bangalore worth Rs 45 lakh
- Maintain the same lifestyle when they retire at 60
Also read: Financial dilemma: Fat salary, no security
Insurance planning
Rahul will require a sum assured of Rs 1.4 crore and Deepika would require Rs 1.1 crore. Though Deepika plans to leave her job once they have a child; it will be cheaper to take a life insurance at this age.
Term insurance policy is the best bet. Term plans have very low premium so a person can afford to continue even with variation of income. Remember: Insurance is meant for risk cover and is not for investment purpose.
The couple has a medical cover of Rs 1 lakh each from their company but they need to increase this cover. An additional mediclaim of atleast Rs 3 lakh each is needed. They can increase this to Rs 5 lakh each as the age progresses.
Next page: Can the afford EMI?
Illustration: Vaibhav Shirke
Jai Adiani is a Certified Financial Planner practicing with Sykes & Ray Financial Planners. Sykes & Ray offers comprehensive & professional fee-based Financial Planning Services in India. Jai Adiani can be contacted on jai@sre.co.in
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