Financial Planning: Malhar Majumder

I, 26, am earning Rs 45,000 with an event management company. I pay Rs 20,000 as rent and send home Rs 10,000. The rest is consumed by monthly expenses, about Rs 7,000, and lifestyle expenses, Rs 5,000. My monthly saving is either negligible or nothing. Plus, to meet some of my expenses, I have been using my credit card for the past three months. My credit limit is Rs 35,000 and I have used Rs 25,000. I haven't been able to pay off my bill. I want to clear the debt and start investing. What should I do? I would be changing my job next month. Should I withdraw my provident fund, Rs 40,000, and invest it?
With this kind of a saving, you should not exploit the revolving credit option. But to repay your credit card balance is a step in the right direction. However, switching funds between one investment (provident fund) to another doesn't carry any real meaning. Please refrain from such action. You should transfer the existing provident fund to your new company, as any withdrawal from it before a specified number of years (five) attracts income tax.

As for fresh investments, rationalise the monthly rental first. This will pave the way for fresh funds for investing. Additional funds can also come by curbing your lifestyle or discretionary expenses.

My daughter will be getting married next year. We need to buy jewellery for her wedding. Given the price of gold, we wish to delay the purchase. However, the funds (almost Rs 6 lakh) are lying idle in my account. What are my various options to deploy these? Or, should we buy the jewellery at this price-point? Is a further rate rise expected?
The price of gold had picked up considerably because of the rising global economic uncertainties. Also, all-round inflation is fuelling its price. As long as these two factors are not brought under control, it is difficult to pacify the prices. However, you have a year to go and you may wait a little longer for a correction in the price (if any) before buying it. In the mean time, the best bet would be to park the money in short-term debt mutual funds, as these may deliver around nine per cent annualised returns, while keeping your money liquid. Keep an eye on gold and buy systematically at every correction.

The writer is director, Gliese Consulting. The views expressed are his own. Send your queries to yourmoney@bsmail.in