Workbook project

financial literacy
Paper: vac
UPC: 6967000008
Submitted to: Ramita mam
Submitted by:Naziya
Roll no:2023/1654
Course: BSC hons zoology
Topic: Prepare a financial plan for a family having
income of Rs. 1,00,000 per month in a metro city like Delhi
and NCR region and another family having monthly
income of Rs. 50,000 living in a small town in north
eastern states like Assam, Tripura, Mizoram, Meghalaya,
Nagaland, Arunachal, Manipur and Sikkim. Both the family
have two children, older one is 5 years and younger one is
3 years old.
Assumptions -
Metro City - living in rented house, no extra income, taken
term insurance and health insurance, future education
goal for older child is engineering and medical studies by
younger child from a reputed institute. The financial plan
must cover emergency fund and retirement plan.
North East States - living in own house, agriculture income
Rs. 20,000 per annum, taken term insurance and health
insurance, children education goal is study in BA Hons. in
Economics and MA Eco. from University of Delhi and BA
Hons. in Japanese language and MA in Japanese studies
from JNU in Delhi. The financial plan must cover
emergency fund and retirement plan.
To prepare a financial plan for both families, we'll need to
consider their income, expenses, goals, and other relevant
factors. Let's start with the family in the metro city:

Family in Metro City

(Income: Rs. 1,00,000 per
month)
• Emergency Fund: Aim for 6-12 months' worth of expenses as an
emergency fund. With a monthly income of Rs. 1,00,000, this would
be Rs. 6,00,000 to Rs. 12,00,000.
• Term Insurance: Since they've already taken term insurance, ensure
the coverage is adequate to meet the family's needs in case of an
unforeseen event.
• Health Insurance: Ensure they have adequate health insurance
coverage for the entire family, considering the rising healthcare costs.
• Children's Education Goals:
o For the older child's engineering education: Estimate the
current cost of an engineering degree and factor in inflation.
Consider setting up an SIP or Systematic Investment Plan in
mutual funds to meet this goal.
 o For the younger child's medical studies: Do the same
calculation as above for the medical studies goal.
• Retirement Planning: Estimate the retirement corpus required based
on their current expenses and expected inflation. Consider investing
in retirement funds or other long-term investment options.
• Additional Investments: If there's any surplus after meeting the
above goals, consider investing in other financial instruments like
mutual funds, stocks, or real estate.

Investments:
SIPs and RDs: Invest in SIPs and recurring deposits for

steady growth of savings.

Gold or Gold ETFs: Allocate a small portion of savings

to gold or gold ETFs for portfolio diversification and wealth

protection.

Term Insurance and Health Insurance:

Purchase affordable term insurance and health insurance

coverage for financial security

 • Total income = 100000 Rs (monthly)

Monthly budgeting plan

HOUSING RS. 30,000 - 40,000

(RENT/MORTGAGE, UTILITIES)

FOOD AND GROCERIES Rs. 15,000 - 20,000

TRANSPORTATION Rs. 10,000 - 15,000 (fuel, public

transport)

EDUCATION Rs. 5,000 - 10,000 (school fees,

educational expenses)

HEALTHCARE Rs. 5,000 - 10,000

CHILDCARE Rs. 5,000 - 10,000

SAVINGS Rs. 10,000 - 20,000 (emergency

fund, retirement savings,

children's education and

marriage fund)

ENTERTAINMENT AND MISCELLANEOUS Rs. 5,000 - 10,000

For the family in the North Eastern states:

Family in Northeastern States

(Income: Rs. 50,000 per month)
• Emergency Fund: Similar to the metro city family, aim for 6-12
months' worth of expenses as an emergency fund, which would be
Rs. 3,00,000 to Rs. 6,00,000.
• Term Insurance: Ensure adequate coverage to meet the family's
needs.
• Health Insurance: Similar to the metro city family, ensure adequate
health insurance coverage for the entire family.
• Children's Education Goals:
o For the older child's education: Estimate the cost of BA Hons.
in Economics and MA in Economics at Delhi University,
factoring in inflation. Consider setting up an SIP in mutual
funds to meet this goal.
o For the younger child's education: Do the same calculation for
BA Hons. in Japanese language and MA in Japanese studies at
JNU in Delhi.
• Retirement Planning: Estimate the retirement corpus required based
on their current expenses and expected inflation. Consider investing
in retirement funds or other long-term investment options.
 • Additional Investments: If there's any surplus after meeting the
above goals, consider investing in other financial instruments like
mutual funds, stocks, or real estate.

It's important to review and adjust these plans periodically based on

changing circumstances, goals, and market conditions.

Total income =Rs.50,000(20,000 Rs per annum agriculture

income)

Monthly budgeting plan

HOUSING RS.10000-15000

(RENT/MORTAGE,UTILITIES)

Food and groceries Rs. 10000-15000

transportation Rs. 5000-7000

(fuel,publictransport)

education Rs. 3000-5000

(school fees, educational expenses)

healthcare Rs. 3000-5000

(insurance premiums, medical expenses)

childcare Rs. 3000-5000

savings Rs. 5000-10,000

(emergency fund, children's education and

marriage fund)

Entertainment and miscellaneous Rs. 3000-5000

Investments:
SIPs and RDs: Invest in SIPs and recurring deposits for
steady growth of savings.

Gold or Gold ETFs: Allocate a small portion of savings

to gold or gold ETFs for portfolio diversification and wealth

protection.

Term Insurance and Health Insurance:

Purchase affordable term insurance and health insurance

coverage for financial security.