How to Save and Plan for Your Child’s Education: A Guide
Education opens up more opportunities than any other investment ever well, as many doting parents would agree. Getting the best education indeed opens doors with no other keys. Oprah Winfrey has rightly said, “Education is the key to unlocking the world, a passport to freedom.” Parents wish the best for their children, and education tops that list. Children can be molded into their best versions through education.
Steps to save and invest for your child’s future
One must ensure that one is financially prepared to enhance their child’s possibility of getting the best possible education. If the plans are made in an orderly manner and in advance, chances are that your child’s dreams and ambitions wouldn’t be compromised.
The decision on time horizon: Achild’s education should be considered as a long-term goal. The earlier it’s planned, the better results it will fetch. Anticipate the total time period of your child’s education from the present time, let’s say another 20 years of education. This will allow you to decide and save the right kind of funds which will suffice enough to provide the best to the child.
Cost estimation: Inflation is at a high and is rising every year. The costs differ from location to location, but it is undoubtedly higher in metro cities than non-metros. Further, private schools are seen to be quite expensive in comparison to public schools. In 2018, premier B-schools increased fees to Rs. 21 lakh for their two-year flagship courses, which was worth Rs. 6 lakh in 2008 i.e., average inflation of 13%. The prices of prestigious foreign universities are soaring high while school education is taking up a massive chunk of parents’ income. Further, it’s not just the fees of the educational institutes, but also involves other related expenses like accommodation, costs of material required, transportation, medical expenditure, etc. too.
Assessing your financial position: Understand and assess your current financial status. This will help you in planning better and saving adequately for your child’s education. This will also help in understanding how much to be saved to start your fund. Analyze your present investments considering future benefits. Savings can be done systematically by keeping a certain amount aside regularly.
Planning the investments:Asset allocation schemes are the best way to invest. Since your financial position and potential are already mapped, you can make better investment decisions. Investment should be made in funds that can counter inflation and also fulfill your needs. If you start early, the amount invested can be less. The strategy should keep on changing every few years with your child growing up. SIPs can be increased in bits to reduce investment. Avoid low return investments.
Insure yourself: Insurance should be considered as protection first and then as an investment. In case of an untimely demise, insurance will keep the family and your child’s education plans afloat. The life cover should be a good percentage of your current income. Optimally insure for not just life, but also for the health of all the family members, which has become so necessary in the current times of the pandemic.
Prepare for the unexpected. Nobody has foreseen the future, but you can secure your and your child’s education by taking corrective actions right now with a holistic approach. EarlySalary enables paying your child’s school fees through EMIs with a credit limit of up to Rs. 5 lakhs. It is easy to use, has flexible repayments, and is one of the country’s leading education programs. School FeES – EarlySalary is designed to streamline the fee deposit process in schools easing the parents. With real-time onboarding and disbursal, EarlySalary is the way to go!
Of course, children’s education is crucial, and money shouldn’t be a deterrent. Every child is unique, and so is their dream!