Your financial questions answered by the experts!
I have heard so much that we should plan our finances. I have a daughter who is only five. Should I plan for her higher education now? Isn’t it too early? How much should I save?
Submitted by Shilpi Balaji, Mumbai
Tejal says:
Financial Planning is done to secure your and your family’s financial needs. Even though your daughter is only five, it is good to start right now. The earlier the better! The power of compounding works better when it is long term. Let’s see the details in the table below:
Daughter’s age: 5 years
Cost of Education in today’s terms: Rs 5 lakhs (Assume she would like to do a post graduation degree)
Time left before graduation: 13 years
Inflation Rate: 7% p.a. and Investment Return: 12%
Cost at time of graduation course: Rs 14.45 lakhs
Investment amount per month: Rs 3,885
Hence, you can see when you break your goals into monthly instalments, it channelises your savings in a structured manner and helps you to track and achieve your goals.
My mother is dependent on me. I would like to give her an independent source of income. Her personal monthly expenses are around Rs 10,000 and the rest of the expenses I am taking care of. She has about 15 lakhs to invest. Where can she put her money to give her regular payouts that meet her expenses? The bank’s fixed deposits rates are coming down. What do you recommend?
Submitted by Nisha Singh, Bangalore
Tejal says:
For Senior Citizens, the government has the Senior Citizens Savings scheme which is offered by banks and from the Post Office. The maximum amount is Rs 15 lakhs. The interest rate is 9.3% p.a. interest and is payable quarterly. The tenure is 5 years. This would be a suitable option to meet your mother’s requirements.
Have any financial questions? Need some advice to kick-start your savings planning? Email Tejal Gandhi from Money Matters at [email protected]
