Child education planning was not something that ever came up in family discussions, except at the time of job hunting or marriage. However, with the advent of nuclear families and single or, at the most, double-child families, things have changed for the better.
For a parent, educating the children is a huge responsibility. The child development process is a continuous process, which starts from birth. A lot of learning happens in the pre-natal stage as well. Child education has taken a new turn with rising education costs. In the past, every family had multiple children who grew up with siblings, learning numerous things from one another.
Today, parents start planning a child’s education from birth. It is a good sign, as the costs of education have risen. So, planning turns out to be a boon in the coming days.
Here we have listed a few easy steps to plan your child’s education with ease.
Child Education Steps:
- Start preparing now – There is no better time to plan your child’s education than now. It would help if you did not waste much time planning for your child’s education. It would be best if you started planning for their future education when you admit them to school. You have nearly two decades to save money. The system of compounded growth will allow you to save a considerable sum before you pass high school.
- Consider Inflation – This is necessary today. The cost of higher education will go up with time. So, don’t expect to get many discounts on education. The average inflation rate is 13%. A course that costs 16 lakhs now might cost 60 lakhs in 2040.
- Avoid Low-Cost Investments – Children’s education is supposedly a long-term goal. So, you should carefully invest in inflation-beating avenues. Moreover, it would help if you went for high-return instruments like mutual funds. Savings schemes and PPF does not make the mark. If you develop long-term goals, you may be able to fulfill your dreams sooner.
- Start with Less –It is beautiful if you start small, but you should aim to increase the amount with time. The concept of stepping up your investment gains precedence over here. As your family income increases, you should also increase your assets. This is very important for your child’s education planning, or for that matter, any other plan.
- Get Insured –This is another decision you must make early on. Life insurance is a protection cover for you and your family. In case of your untimely demise, you must ensure your child’s education does not stop. Your life insurance cover should be 10-20 times more than your income. It will provide financial safety for your family in the long run.
These steps should see you successfully amassing a good amount of wealth for your children. The amount which you collect should go into your child’s education.
Invest in Child Plans:
You must invest in a child education plan. Child plans are specific child-based plans which will take care of your child’s education. It will also help you to secure the life of your child. One of the most important goals for a parent is to see to it that the child receives proper education. With the help of a child plan, you can achieve all the aspirations that you have set for your child. You can save if you are well-organized. For that, you need to chalk out your finances. Once you have accumulated a significant amount of money, you can have peace of mind. Then start looking for plans from nationalized banks, private banks, and mutual funds.
You should never put all your eggs in one basket. You must put them in separate ones. These investments will require you to put in money at regular intervals. That is essential. You have to understand that education planning is not a one-day affair. It is a continuous thing. So, you have to be regular and consistent.
Nowadays, a lot of people marry late in life. So, you need to take into account this aspect as well. You have to plan for your retirement and child education, both simultaneously. By the time you retire, you should have a corpus for both. It is essential today due to rising costs and inflation.
Moreover, you will never want to depend on your children for money. So, think about both these aspects. It will help you to create a fund without much hindrance. You can contact a financial counselor if you are unsure about your prospects.