Cash Flow Issues? Reset Your Goals

Senior bank manager Krutti Sundar Patra needs to cut down on expenses and save more, says Pankaj Mathpal, a Mumbai-based certified financial planner.

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Mumbai-based Krutti Sundar Patra, 33, is a senior manager in a public sector bank and he is planning to get married soon. He lives in his own house, which he bought in 2015. His father, a senior citizen, and his mother, aged 59, live in Odisha, and both are financially dependent on him. Patra wants to retire comfortably, and he is already saving for it. “I also want to go to Amsterdam for my dream vacation. So, I want to start financial planning early on to reach these goals,” he says.

Cash Flow and Net Worth

Patra’s monthly income is ₹65,000, and he spends ₹37,000 per month, including the home loan EMI of ₹15,000. Another ₹15,000 a month is spent to meet the personal expenses of his dependent parents. He also pays an annual premium of ₹61,000 for his life insurance policies. According to financial planner Pankaj Mathpal, Patra should lower his budget for some of his future goals and curtail his expenses to increase his monthly savings. He should also convert his life insurance policies (except the term plan) to paid-up status to reduce premium. It will help him manage his cash flow better and save more for his future financial goals.

The total value of Patra’s financial assets is ₹9.50 lakh, out of which ₹6 lakh is invested in bank fixed deposits and ₹2 lakh is kept in a savings account. He has also put ₹1.40 lakh in equity-oriented mutual fund schemes. Patra has a self-occupied house, and its current value is ₹35 lakh. He has taken a home loan for buying the house, and the current outstanding is ₹13 lakh (see table Assets and Liabilities).

Taking Care of Essentials