ot a question about your money? What you should or should not do with it?

Our expert Uma Shashikant has the answers.

My wife is going to be delivering a baby soon.

If I have Rs 1,00,000 to invest right now, how must I do so for my child's future?

Also, I would like to periodically invest for the same.

- Sreenivasan

Make sure you have taken into account all the expenses required when a baby is born - doctor, hospital, initial expenses and possible family rituals. 

Since you have a long period to save, say 15 years, before the money is needed, you may like to look at a monthly saving option like a Systematic Investment Plan. 

An SIP is an investment scheme provided by mutual funds where a fixed amount is directly invested every month in the fund. To understand how it works, read How to invest in a mutual fund.

Choose an option that has both equity (investments are in shares) and debt (investments are in fixed-return instruments), with a higher component in equity. 

Most funds have plans for children which have both, debt and equity. 

If the money you have is something you are unlikely to tap for your requirements in the near future, invest in an equity mutual fund. 

• How a couple can manage finances

My wife and I had a combined monthly income of Rs 45,000.

Recently, she stopped working and my monthly take home is Rs 23,000.

I am heavily in debt: credit card loans (Rs 1,10,000), bike loan (Rs 2,700), personal loan (Rs 3,000).

This is addition to my rent and other household expenses.

Should I consolidate all the loans into one?

- Avneesh Thakur

That is a good idea. Consolidate your debt and begin paying the Equated Monthly Installments.

Be patient. It will take you a long time to pay it all off. Until which time you will have to control your credit card spends. 

Consider other options for your wife to work. Perhaps she could do something out of her home. If she has the skill sets, she could be able to use them in a manner that suits her best, to augment your household income. 

Desist from taking bets with your money to make good your losses. Exercise patience and caution.

• Save and repay your loan

I am 23 and live in a joint family of eight.

I recently began working and earn Rs 15,500 per month. My monthly expenditure is Rs 7,000.

I want to buy a house worth Rs 25 lakh (Rs 2.5 million). That means I will be paying an EMI of Rs 8,000.

How must I invest my money to save for my marriage and emergencies?

I would like to save at least Rs 2,00,000 in the span of two years.

- Himalay

Start by making a list of the big expenses that you will have to incur over the next three years. It could range from buying yourself a vehicle, music system, television, outings, social events, marriage and the like. 

Then check to see whether Rs 7,000 a month will be sufficient to take care of all that.

If you lock your money in the house, you will not be able to use chunks of it to meet your expenses. You then run the risk of taking personal loans and credit card loans at very high rates. 

If your house costs you Rs 25 lakh, a good question to ask is whether you have at least Rs 10 lakh (Rs 1 million) as savings before taking that loan on?  If yes, you have some buffer. 

So, focus on creating this buffer for yourself first. That will help you meet your sudden unexpected needs.

If you invested Rs 5,000 a month, and if you got 8% on that money, in three years it would amount to Rs 2,00,000.

If you choose an Equity Linked Savings Scheme, you will not only save taxes, but also earn a decent return in the long run. These are mutual funds that invest in the stock market as well as give a tax benefit. But, the scheme comes with a three-year lock-in. 

To obtain more information on these funds, read Invest in an ELSS fund.

Begin by investing Rs 2,000 every month in a bank deposit and Rs 5,000 in a tax-saving scheme. After six months, review your experience.  If you do not want to put your money in a bank deposit, you can try a cash fund.

These are funds that give a higher return than a savings account and are meant as a short-term parking place for your money. Read, Tired of your savings account? to understand them better.

Are you able to set aside Rs 7,000 per month, without problems? If yes, great! If not, imagine the problems you would have if you had an EMI of Rs 8,000.

Illustration: Dominic Xavier

Got a question for Uma Shashikant? Please write to us.

Note: Questions may be edited for brevity. Due to the tremendous response, all queries will not be answered.

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