I last shared my financial review with the Asan Ideas for Wealth Facebook group in 2022 in this post
I’m following up with some updates as we close 2024, hoping they might help someone. I’m sharing this post in my blog and the Facebook group to preserve a copy.
Some goals derailed in between due to the five-month job break and some unplanned expenses during that period, which required me to dip into savings.
Background: Double income family with 1 kid + 2 dependent parents
Goals:
- Short Term: 5-7 years: Downpayment for our first house
- Long Term:
- 26.5 years for retirement
- 16.5 years for child education
Following the wisdom of a group member’s advice, I have shifted my priorities around keeping retirement as the #1 priority vs. a child’s education, where an education loan is available for backup. ESOPs/RSUs are not tracked anywhere currently since they are illiquid paper money. They can be used to boost investments when they become more liquid.
Emergency Funds: 6 months (assuming no income for both and no change in lifestyle) or 12 months assuming no income for me and a needs-only lifestyle.
Health Insurance:
-
Parents: CGHS
-
Self + Spouse:
- Employer-provided insurance
- Private health cover from Star Health (individual covers)
-
Child: Employer-provided
Term Insurance: 10x of current annual income or 25x of current annual expenses
Expenses Splitup:
- 32% - Household (incl rent & Medical)
- 14% - EMIs
- 41% - Savings: 14% - Mutual Funds; 27% - FDs & RDs
- 10% - Subscription and insurance payments have significantly increased due to higher term insurance coverage, health insurance premium hikes, and USD to INR exchange rate fluctuations.
- 3% - Health: gym, personal training, etc.
- Discretionary, unplanned, and vacation expenses are handled through monthly variable payouts and are not part of the financial planning.
Investments Split up:
- Mutual Fund SIPs: 14% of monthly income
- 40% Nifty 50
- 40% Nifty Next 50
- 20% Gilt Fund
- Cash investments: RDs and FDs: 27% of monthly income
These are split between the planned emergency corpus, upcoming expenses for next year, and loan foreclosures next year.