Walking down a street in Jaipur’s new city area, Monika and Neeraj Narang, both 27 years old and originally from Sri Ganganagar, Gujarat, are symbolic of a new team getting its act together. Married for a year, Neeraj is an executive (corporate banking operations) with Axis Bank while Monika teaches at J.G. Public Senior Secondary School.
Neeraj’s experiences prior to his marriage have a significant influence on the couple’s dreams and goals. His father died when he was young. The uncertainty that brought into his life is the reason he gives maximum priority to having a proper education plan for his children, whenever they decide to start a family.
He has a good grounding in finance since he is in the profession, but “Monika is the chief finance officer of the house”, he says. The couple lives in a rented house now. Buying a house within the next six years is another priority for them. They want to take a few vacations abroad and Neeraj plans to take his mother along, at least on some of these trips.
However, at the moment, they are working off a car and personal loan. Neeraj keeps track of his investments as well as the markets. “My risk appetite is high and I can track my investments,” he says. Echoing millions of other dual-income young couples, he says, “All I need is a long-term strategy that is connected to the time frames I have for my goals.”
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The lower cost of living in Jaipur works in their favour: They are in control of their daily expenses. The financial tight corners they both manoeuvred through at the beginning of their respective careers four years ago have left a lasting impression. They want a solid retirement plan that will ensure that they and the family they plan to start soon will not have to cut corners in the years to come.
THE RIGHT STRATEGY
— Gaurav Mashruwala
The Narangs’ most important goal is to buy a house worth Rs25 lakh after five years. They also want to save Rs5 lakh for their children’s education in 18 years and another Rs5 lakh for their marriage. As part of retirement planning, they want a post-retirement monthly inflow of Rs15,000 after 33 years. The goals are at today’s rate of inflation.
THEIR POSITION
Cash flow: The couple’s total monthly inflow is Rs35,000. Their monthly outflow is Rs26,550, including household expenses, rent, entertainment, savings and two EMIs (equated monthly instalment) towards a car and a personal loan. The EMI payouts are 20% of their income.
Net worth: The total value of their assets is Rs4.89 lakh. This includes assets for self-consumption worth Rs3.2 lakh. Thus, assets from their savings and investments are worth Rs1.69 lakh. They have liabilities worth Rs3.16 lakh, which constitute 64% of their total assets. If we remove the value of their personal assets from their total assets, their liabilities are 186% of assets.
Contingency fund: Against mandatory monthly expenses of Rs18,100, the balance in their savings bank and fixed deposit accounts is Rs65,000.