A child’s financial security is the prime responsibility of every parent. But education is becoming increasingly expensive. The Economic Times Online research found that the overall expenditure of schooling in India in a good private school is no less than ₹30 lakhs. This is for the age group between 3 to 7. However, this is not fixed. There can be an uptick since tuition fees keep rising every 2-5 years. So, one needs to have a smart strategy along with a flexible education plan to be able to fight inflation.
A good child education plan can act as a strong foundation. You will be in a better financial condition by the time they start opting for high school and college. Learn how to start investing to save enough for your children.
Current Education Cost
Check the expenses for school, graduation and post-graduation in top institutions. This will usually vary for different courses like architecture, actuarial science, MBA, MBBS, Hotel Management and Engineering. It will help you get an idea of the total cost that is required to fund the courses comfortably. Include miscellaneous prices like stationery, school trips, projects, uniforms and books. This will increase all the more if the child is to travel outside the town to study with accommodation, food and transport costs. Fixing the budget makes it easy to start the investment procedure with confidence.
Use an Online Calculator
Fill in the necessary variables in the child plan calculator like:
- your age
- child’s age
- desired education
- corpus for desired education
- child’s age when the corpus would be required
- inflation rate and
- growth of an investment.
Double check the information and hit ‘calculate’. Now you get an idea of how much you have to invest every year and for how long to reach the target. Plan accordingly and buy a child education policy to be able to cater to primary, secondary and further studies without having to break your savings.
Be an Early Bird
Starting as quickly as possible lets you grow the money over a long horizon. The interest may be reinvested over time to generate bigger returns. This is critical because putting your child in a good school will not come cheap. Having a solid education plan along with insurance can help your kid fulfil their educational pursuit without the hassle of loans. Accumulating a small corpus may jeopardize other financial goals. So, start planning even before the child is born to ensure a promising future with or without you.
Successful parenting is no bed of roses. But having a good child education plan helps to safeguard the dreams and aspirations of the little ones. You may opt for numerous risk management features like auto rebalancing, safety switch or systematic transfer option to beat extreme market volatility. A mix of insurance and education schemes makes sure education is not hampered by the untimely death of the parent. They will continue to receive insurance pay outs during major events like going abroad for a degree.
