“If you think education is expensive, try ignorance.”—Andy McIntyre
The quote above is apt to drive home the point that education is vital. Not just vital, quality education is colossally essential for the all-round development of your child.
So, at every step of the way, it is your parental duty to ensure that your kids get nothing but the best in terms of pedagogic skill. And the higher they climb on the academic rung, the more you will have to shell out financially. This news may seem disconcerting at first, but with a little foresight, you can sketch out a child education plan that will help you pay every paisa to fulfil their scholarly dreams.
Reasons You Should Start Preparing for Your Child’s Education Now
Do not put off till tomorrow what you can do today.
This adage should be a warning to you not to delay setting aside money for your children’s future educational endeavours. As time passes, there will be inflation to contend with which will make the cost of receiving a decent education skyrocket.
Here are three reasons why you should start preparing for your child education plan today.
- If you assume a 10% annual inflation, then the course that costs Rs. 6 lakh at present will cost about Rs. 15 lakh in after sixteen years. You will have to save money accordingly.
- God forbid, but what happens to your child’s education should you die? While you can’t insure yourself against death you can prepare for the eventuality. Save money with this in mind or else factor in this cause and invest substantially.
- The value of savings will decrease with time. So even if you are diligently saving now, , the real value of the net saved amount will fall due to inflation.
You do not need more pertinent reasons to start the process of saving for your child’s education from today itself. They will thank you for your foresi
How to Go About Preparing for Your Children’s Education?
While you understand the importance of preparing your child future plan, it is time to consider how to go about it.
Where should you start? How much should you save? In what should you invest?
Here are three routes to secure the necessary funds your kid will require for his/her education.
- The most direct investment is putting your money into PPFs. Public Provident Funds are a stable and secure way to secure the academic future of your children. It is a fifteen-year scheme, and at the end of it, your child will receive a substantial and tax-free fund.
- The second place to invest is in child ULIPs. These policies cover one parent and a child. In case of the death of the insured parent, the other surviving parent will get the money from the insurance. And the child will eventually receive the amount when the term matures.
- You can also consider investing in the securities market, as these investments yield much higher returns. Somebody once said that nobody became a millionaire by saving money. That is entirely true. To make quick cash stalk the stock market and reap dividends.
- Consider taking out a educational loan to finance the study of your child on foreign fields. Instead of steady saving, it is a one time off way by which you can raise the needful.
Now that you know how to go about saving and investing for your child’s scholarly ambitions, here are some tips you can use to invest wisely.
Tips to Invest for Your Child’s Education
You need a sound child investment plan to secure the academic goals of your kids. A useful guide for child’s education can help you to achieve this end.
Here are three hot tips concerning child education plans that can help you invest better.
- Start early! The early bird catches the proverbial worm – you can too, and acquire the chunk of money that will help your kids. The best time is the present, and the investment offers you will receive now are more comfortable to consider the ones you will receive later.
- Pick the right investment option. When you sit down to make a portfolio fo your child, form a quick think tank and weigh the options of every single investment avenue you have.
- Do not depend on your child’s education fund to bail you out of tough times. That money is for you to spend on their learning. Keep a separate emergency fund.
As a closing point, remember to de-risk your portfolio some three years before the time when you will require it. In this way, you can effectively secure a child education plan for your kid.