Certified financial planner and wealth advisor Gaurav Mashruwala comments and advises Neha about her finances.

Wealth creation is never easy. It is like sowing seeds, watering them regularly and nurturing them until they grow into fine trees. It will take years before the tree of wealth grows tall.

Currently, Neha is only setting aside Rs 500 in mutual fund and Rs 1,667 towards insurance premium. Her investments add up to Rs 2167 per month. This works out to about 15% of the take home pay being invested.

Unfortunately, a major portion of this goes towards paying her insurance premium. Insurance is never a good investment instrument, as a large portion from the premium is deducted towards expenses and brokerage.

Usually, it is recommended to save a minimum of 10% of one's take-home income. However, in Neha's case, since she is single does not have any family responsibilities as yet, she should try and reach a figure of 25%.

This will be difficult but not impossible.

She will have to deal with dilemma of savings and splurging. Splurging will give immediate gratification and anxiety later, as to whether she has saved enough to ensure her financial security. On the other hand, savings will give some anxiety now -- for example, worries like if I concentrate on saving, when will I enjoy life -- but will give gratification later when financial security is achieved.

Where Neha is today

Emergency fund: She has absolutely no emergency fund. In case of adversity, she will have to leave Delhi [Images] and return to her family.

Health insurance: Her employer is covering her to the extent of Rs 3 lakhs

Life insurance: She has life insurance to the extent of Rs 1 lakh. At the moment, since she has no financial dependents, she does not really need life insurance.

Savings & investment: She has invested Rs 5,000 in SBI [Get Quote] Magnum Tax Gain's fund. She also has an SIP in Fidelity's equity based fund.

Net worth: She has total invested assets of about Rs 8,000 in equity based mutual funds. There are absolutely no liabilities.

The way ahead

Emergency fund: First, she should set aside funds equivalent to about three months of expenses as her contingency reserve (for emergencies).

Funds equivalent to about one month's reserve should be kept in form of cash at home and rest should be kept in savings bank linked to fixed deposit.

Ensure there is ATM access to funds.

Savings and investment: Neha should continue her SIP of Rs 500 in an equity-based fund. She should, ideally, increase this amount to Rs 1,500. This investment should be for her long-term goal of financial security.

Over and above this, set aside additional Rs 2,000 in a debt-based mutual fund for the next 18 months. Funds so collected should be utilised to purchase a laptop computer costing around Rs 40,000

'The amount of money you have has got nothing to do with what you earn... People earning a million dollars a year can have no money and... People earning $35,000 a year can be quite well off. It's not what you earn, it's what you spend (save.)" Paul Clitheroe

• Neha's profile                               
• Snapshot of Neha's finances

Earlier in this series, we featured: 

~ Anjali and Uday: Successful, career minded individuals; double income, no kids.

~ Nikhil and Arpita: Young, earning well. Nikhil believes in leading a luxurious life "within limits" and loves to shop. Arpita believes in saving for the future.

~ Prashant: Single. Lives in a middle-class joint family. Believes in saving. Wants to buy a home by the end of the year.

~ Anita: Single. Earning well. Has recently bought a home. has no savings -- no Public Provident Fund, no investments in mutual funds or bank fixed deposits either.