Dr Sujoy and Rupa Roychowdhury. Indranil Bhoumik/Mint
It is easy to lose track of finances, and a busy schedule doesn’t help matters. Dr Sujoy and Rupa Roychowdhury had to take some tough decisions to get their finances back in order. Along with their adviser Uttam Kumar Sen, it took them a few years before they reached a certain level of stability. They admit that without the tough measures and a comprehensive financial plan, the story could have been very different. “I was in a real mess,” said Sujoy. It was not easy, but they knew they had to do what needed to be done.
Burden of loans and over-spending
Sujoy came back from the UK in 1996 to start practicing in Kolkata. The house they lived in then was too small for the family of four—the couple, and their two children, Mayuri, who is 26 years old now, and Shubhayu, who is 19. They took a home loan to buy a bigger house. This was followed by a car loan. “Car loans kept changing. Then we got two more houses,” said Sujoy. “I was earning enough, but had many loans. My father passed away prematurely, and some of his debt also came on to me,” said Sujoy, adding that his father was his bedrock and losing him shook their sense of security.
At the same time, Sujoy was busy with his profession and could not spend the time needed to get a grip on the family’s finances. “I was very busy. I could not concentrate (on finances). I was under a lot of stress,” he said. This prompted the Roychowdhurys to get expert advice.
The two main reasons behind the high debt was that the investments were not according to any plan, and the expenses were high. “We were spending lavishly. We used to travel a lot—take 3-4 big holidays in a year. We used to eat out often; and there were club expenses,” said Sujoy. They were also supporting a household that had aristocratic roots, which meant paying for a retinue of house help and their families. “We went shopping, buying expensive bags, clothes and jewellery,” said Rupa.
The loans and the expenses of maintaining such a lifestyle meant almost no savings. Going to a financial planner helped the couple set things right. “Now we are more systematic. We have learned to strike a balance, to save…. He (Sen) has taught me about SIPs (systematic investment plans),” said Sujoy.
During the initial meetings it became clear to the couple that if they wanted to achieve their goals of children’s higher education, a healthy retirement corpus for themselves, and getting rid of loans, they had to take strong action. First, they had to cut expenses so that they could save more, and which could then be invested appropriately. “There were fights between us initially. But it is completely different now. I also told my daughter, do you want to spend all your time with friends…or do you want to go to the US and study? Initially, they were not happy but they had to understand,” said Sujoy.
The spending has reduced over the years. “Now we take about two quality holidays a year,” said Sujoy, adding that the family eats out about once a week now. “We started choosing middle-class hotels,” added Rupa.
Once goals were set for the financial plan, assets and investments were designated based on these. “There was a sitting with Sujoy, then a sitting with me, then both of us, and then all four of us,” said Rupa. Health and life insurance covers were enhanced appropriately. SIPs in mutual funds were started, and these amounts kept increasing. “I learnt self-discipline. I started depositing in the bank, and the amounts increased from Rs25,000 to Rs50,000,” said Sujoy. A lot of this was due to regular reminders from Sen. “He used to keep regular track and kept reminding us,” said Rupa. The couple had many fixed deposits, which were moved to mutual funds.
One result of this disciplined investment has been that they have been able to send their son to pursue Medicine in Pune, without having to take a loan. “No loan was taken; investments were used. We were prepared for our son’s education needs, and didn’t repeat past mistakes,” said Sujoy, who has taken an education loan for his daughter’s masters course in economics in the US.
They have also realised that while “we must invest for our children, we must also think about ourselves,” said Rupa. Trained as an educationist, she plans to go back to teaching in about a year. An ongoing goal is to settle the loans within a year, said Sujoy.
The discipline has helped the family. “We are more responsible now. Today, we live a better life,” said Rupa. “I don’t feel so helpless now. And both children have learnt to save,” said Sujoy.
The Roychowdhurys are now on the right track towards their life goals.