MF investment: Please advise on the appropriate monthly savings amount in SIPs, considering a 10% annual SIP step-up, for my child's future aspirations

What amount should I begin saving in SIPs with a 10% annual SIP step-up for my child's future and education? The savings would cover expenses for my child's education, foreign studies, marriage, and house. My wife and I have a combined monthly income of approximately Rs 2 lakh.

My Desired Goals are:
> My child's education
> Funding for foreign studies
> My child's marriage
> Contribute towards purchasing a house for my child

Name withheld. 

Reply by Hrishikesh Palve, Director, Anand Rathi Wealth Limited

For many parents, ensuring a secure future for their children is of utmost importance. Making wise investments is crucial in achieving financial stability as they mature. While navigating the financial markets may appear intimidating, following a systematic and disciplined approach can lead to significant wealth accumulation for individuals. A popular strategy that has garnered widespread adoption among investors is the systematic investment plan (SIP).

Here's how you can go about it

1. Create an income-to-SIP ratio, which should be 25 to 30% of your income should go to the SIP, and when you are investing for multiple goals, create an investment basket for each goal. In your case, create an investment basket for child education expenses, child marriage expenses, purchasing house & retirement corpus. Now, start investing small SIPs in each basket.

2. Along with SIPs, consider doing a step-up, which will address investing your disposable income with rising income levels every year.

3. Maintain an emergency fund account consisting of the next 6 months to 1 year's expenses. This strategic allocation will help you reach your goals comfortably while ensuring short-term liquidity for emergency expenses.Maintain an asset allocation of 80:20 in equity and debt and diversify the investments across MFs and AMCs. 

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