Rising education costs and other education-related costs are some of the biggest costs that parents often worry about when planning for their child’s future. Right from K-12 to higher education, education costs can take a toll on your overall financial planning if you don’t adopt an effective strategy to secure your child’s future. Whether your child wants to pursue higher studies in India or abroad, education costs are rising at an exorbitant rate. Let’s understand some of the ways to secure your child’s future.
Start early
The earlier you start, the better it is for you and your child. Starting early aids in accumulating a larger corpus for your child’s future. For example, you start saving for your child when your child is 8 years old so your child can start with his higher education in a couple of years. Considering the inflation you invest a certain amount. On the other hand, if you start investing when your child is 3 years old, you will be required to save a lesser amount.
Pick up the right investment plan
Right investment plans can make or break your investment planning of your child’s future. For instance, if you have saved a big corpus, so that it can fund your child’s academic aspirations but have saved in the life insurance which will yield lower returns as compared to the most mutual-funds or equity market, it is a big no-no.
However, you must also consider your risk appetite and the tenure of savings that you want to opt for while making decisions. You can choose from child plans, mutual funds, Gold ETFs, Equity shares, or Fixed deposits, depending on your requirement.
Have clear goals
Consider your age, your child’s age, inflation rate, its effect on education cost and other lifestyle costs and set a goal. As a young parent, you can adopt an aggressive route and invest in equities, and leverage profits. However, with time consider moving your funds from equity to other safer funds like fixed deposits.
Evaluate your portfolio
Create a roadmap and evaluate your investment portfolio from time to time against your set benchmarks. Know which of the plans in your portfolio are overperforming or underperforming and accordingly make the decisions. Depending on the performance of your existing funds, decide if you plan to maintain the same funds or change them to earn higher returns.
Spread the risks
When planning for your child’s future ensure you select a diverse asset class in order to spread the risks across the funds. If you can invest in equity, ensure you invest in other risk-free or low-risk funds too. This way if a part of your investments proves to be risky, the other portion will save the day.
Expert advice
Although researching thoroughly about which funds are best for securing your child’s future can bring some great insights, it is best to get expert advice too. We at ANS have the best expertise available for all your needs, You can always get in touch with us.
So, we hope this helps you plan for your child’s future to provide them with quality education, a better lifestyle, and ultimately, a comfortable life.
