Salary earners require adequate life cover

a cost accountant, works for the government. A national level athlete, he lives in Faridabad with his wife Rekha (30), his father and his grand parents. Vijay and Rekha have a 3-year-old son Aarnav. 

What are they saving for? 
A house worth Rs 60 lakh after 20 years. * Rs 20 lakh for son's education after 20 years. * Rs 30 lakh for son's marriage after 25 years. * A corpus of Rs 10 lakh to support the parents. * A corpus of Rs 50 lakh for retirement. * The couple also wishes to own a holiday home, buy a luxury car and go on a foreign holiday Stock Market Trading Tips

The above costs will revised based on inflation. 

Where are they today? 

Cash flow: The couple's total annual inflow from all sources is Rs 6.61 lakh, which is almost equivalent to their outflow — comprising routine household expenses, insurance premium and miscellaneous expenses Intraday Trading Tips

Net worth: The total assets are worth Rs 70.30 lakh, which includes cash and near-cash assets of approximately Rs 1.20 lakh. Assets for personal consumption are worth Rs 66 lakh. These include the family home, a vehicle and jewellery. The family's assets from an investment perspective are worth Rs 3.10 lakh. They also have an outstanding personal loan liability of Rs 1.20 lakh. 

Contingency fund: The couple's balance in savings bank account, liquid funds and cash comes to Rs 1.20 lakh, against mandatory monthly expenses of Rs 49,000. This is approximately 2.5 months' reserve Financial Astrology Trading Tips 

Health & life insurance: The consolidated health cover of Vijay, Rekha and Aarnav is Rs 3.50 lakh. Vijay has a life cover of Rs 50,000, while Rekha and Aarnav have Rs 5 lakh each. 

Savings & investments: The couple has Rs 10,000 balance in savings bank account, Rs 10,000 in cash and Rs 1 lakh worth of liquid funds. Their accumulated corpus in EPF is Rs 3.10 lakh Commodity Trading Tips

Fiscal analysis 

The couple is saving 6% of their total inflow. Considering that Vijay is the sole earning member of the family, there is a need to enhance his life cover. Also, there is need to increase health cover. As and when possible, he should increase savings to meet future requirement. Those savings should be in liquid assets Nifty Trading Tips

The way ahead 

Contingency fund: The couple must maintain a contingency reserve of Rs 1.50 lakh, out of which Rs 15,000 should be held as cash in hand and the balance in an FD linked to a savings bank account. They should ensure they reach this corpus in five-six months. 

Health & life cover: Vijay should buy an additional health cover of Rs 5 lakh each for himself and his wife and Rs 1 lakh for his son. His life cover is insufficient and needs to be enhanced to Rs 50 lakh by way of a term plan. This can be planned in the next three-four years Personal Numerology Trading Tips

Planning for financial goals 

Home buying: Vijay must focus on this goal after making enough provision for Aarnav's education and marriage as these are a priority, and there is already a family house. 

Child's education & marriage: Once the contingency reserve is provided for and insurance recommendations are followed, Vijay can start a small SIP in an equity fund. He should keep increasing this amount by 10% every year Free Stock Share Tips 

Parental responsibility: Currently, the routine income is taking care of the elder members in the family. If possible, Vijay can utilize the bonus and increments received during employment to build a corpus in the form of a bank FD to meet any requirements for a large fund in future. 

Retirement planning: The EPF contribution can be continued with. The couple has a long way to go for retirement. Once they provide for their child's future and create a corpus for the parents, they must focus on this along with the goal of home buying Free Jackpot Trading Tips