Why use the child education planner?

Child education plan is one of the most important life-stage goals of parents. Since good higher education is an important factor in career success it is of utmost importance for parents. Many parents will be willing to sacrifice some luxuries in life to afford the best possible education for their children. However, lack of awareness and proper planning can leave you short of achieving your children’s education goals. We will explore how to use a child education planner to save and invest for your child’s higher education

Why should you use child education planner?

Competition is intensifying every passing year. Since seats in Government institutions are limited, many students have to pursue their higher education in private institutions where costs are several times higher. Parents must budget for higher costs for children.

Cost of higher education in India has sky-rocketed over the years. Education inflation has been 10-12% (annual) over the past 10 years or so. If the current cost of a higher education, your child aspires is Rs 20 lakhs, in 10 years the cost will be more than Rs 50 lakhs. A child education planner will factor inflation in estimating how much you need to save and invest for your child’s higher education goals

With rising prosperity in India, many parents are sending their children to study in foreign universities. If you also want foreign education for your children, then the cost will be several times higher than that of in India. You should use a child education planner to save and invest accordingly.

How to use a child education planner?

Define your goal: You should estimate how the education which you aspire for your child will cost, factoring in inflation. A proper Child education plan will help you estimate the inflation adjusted cost.

Have a plan: Child Education Planner will guide you as to how much you need to invest in order to achieve you / your child’s aspiration of higher education.

Start early: By starting to save when your child is young, you give yourself sufficient time to accumulate the corpus needed by the time your child is ready for higher education. You can benefit from the power of compounding over long investment tenure if you start early.

Saving is not enough, you need to invest: To accumulate a sufficiently large corpus for your children’s education, you need to invest your savings in the right asset class in order get the returns needed to achieve your child education plan goals. You should invest in mutual fund schemes of suitable risk / return profiles. Equity mutual fund schemes are suitable for long term financial goals

SIP for your children’s education: Through SIP investment in the right mutual fund schemes, you can start investing from your monthly savings when your child is young and leverage the power of compounding over long investment horizons.

Have a separate fund for children’s education: Do not invest your savings for children’s education in a general-purpose fund. Your child’s education is your most important priority, and you will not want to compromise on it.  After you have planned the child’ higher education through a child education planner, have a separate fund for that purpose. You should consult with your financial advisor if you need help in planning for your children’s education.

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