We outline a 5-point agenda to help you plan your child’s future education in the best way.
Education is everything in today’s competitive times. A good education can put your child on the track to a stable career and prospects. But providing a good education is stressful, since education costs are quite high in India.
As a parent, you wish to provide your child with ample education opportunities. This requires a large fund of money – consider this plan to amass the money for your child’s education:
- Save, save, save. Regular savings can help you overcome any future financial crises. Open a savings account in your child’s name and deposit money in it regularly. It is better to choose a savings account that offers compound interest, so that the saved corpus can grow faster. Aim to set aside money in this account every month, and by the time your child is 18 years old, there will be a big savings fund waiting for them.
- Set goals for the future. Nothing is ever accomplished without careful planning. This requires listing down future goals for your child. As your child grows up, you can know their interests and the probable course of study they will enrol for. Set goals for how much money you will like to have in your hands for your child’s higher education at age 18. Now break down this figure into yearly increments, and draw up a plan to generate these revenues on a yearly basis.
- Make the right investments. Your money must work for you even when you sleep – and making investments in the right instruments can do this. Create a diverse portfolio encompassing Equity Linked Savings Plans, debt funds (for short term gains), ULIPs, ETFs (Equity Traded Funds) and gold bonds, for example. These will generate handsome wealth for your child’s future, and also give you several tax benefits.
- Buy a child policy. Buying a child policy is one of the smartest financial decisions you can make for your child’s future. A child policy creates, through the regular payment of premiums, a large corpus for their future ambitions. The plan has maturity and death benefits, and it takes care of your child’s future whether you are present or not. Thus, the child policy creates a safety net for your child while giving you peace of mind. The best policy for your child will have affordable premiums and premium waiver in case of the parent’s demise, among other benefits.
- Buy a term plan. You can never be certain what the future will bring. Though life does not give you prior warnings, it helps to prepare for every grim eventuality. One way to protect your family and your children’s future from a loss of your income is to buy a good term insurance plan. The term plan provides one of the largest sum assured amounts across the life insurance spectrum. In your absence, the plan money can be easily put to use for your child’s higher education. Also, the plan premiums are quite affordable so it is not a high expense for you.