Every parent aims to create an ideal opportunity for the growth and development of their children. Start early to save for the education fund of the children and you will be ready with the right amount of money when the child is ready to go to college. Easy yet prudent steps such as a child education policy will help you build funds without compromising any of your present lifestyle or plans. Here are a few points about child education plan that every parent is looking for:
Do not delay the process of saving for your child’s future
Planning for the education of your child is a long-term financial goal. Your child will go for higher education at the age of 18, which gives you around 2 decades to create a fund that is right for the needs of your child. You can take the help of the child schemes in India to create the fund. The effect of compounded growth will allow you to achieve the goal with very small monthly payments.
Make sure you take inflation into account
Higher education becomes more expensive every year due to inflation. The course fees could become as much as 10 times in 2 decades. So, make sure there are no mistakes in your calculations. If you cannot arrange the funds for your child’s education, you might be depriving him or her of quality life.
Avoid investments with low returns
Always invest in instruments that can beat inflation. If you invest in a long-term plan, the risks become moderate and can produce excellent returns. Return rates on the equity market can easily defeat the inflation rate. You need to make sure that your child plan has an underlying equity-linked investment instrument.
You can start small and then step up
As the huge money requirements may scare you, the best investment plan for child education should allow you to step up gradually. For instance, if your earnings increase by 10% each year, you should also increase your savings by 10%. Allow your investments to build up, which will make sure that you reach your goals easily.
Keep yourself insured
Last but not the least; you should buy an insurance plan for yourself. The loss of a parent and an earning member in the family can hit hard on your children. Your children are your financial dependents. You need to make sure that your absence does not hamper their lives by bringing them under financial duress.
Your efforts and education plan should give wings to your child’s dreams, and you can do that with careful planning.