Education Planning
Planning can be different for every family depending upon the age of child, type of the education child want to study, your current income, your assets and liabilities etc.
Here are a few TIPS that may help kick-start your planning:
Create a Financial Plan with a goal in mind:
First, make an estimate of the costs that will go into your Childs education. Your cost should take into account inflation.
- We can plan in such a way that in a particular month, child will get a particular amount to run his/her education properly on a one time investment that you are making today.
- If someone does not have a big sum to invest today, he can invest through SIP (Systematic Investment Plan), on monthly or weekly basis.
Insurance of Earning Parent
We can take an insurance that covers the life of the working parents. If God forbid anything happens to earning person, insurance companies pay lump sum money, so that child education is not suffered.
Review the plan
Regular reviews of the plan will help you stay on track with your target goals. Review it at least half yearly and with every major life change such as new child, career advancement or move to a bigger house.
Top up as and when you can
You could consider increasing the amount of contribution annually or top up your regular contributions when your income increase such as when you receive a bonus or get a pay rise, in order to meet your target earlier or achieve an even large fund.
No Dipping into the funds
Choose a plan that locks in your funds for your children’s education till they are ready to leave for college. If it is easy to cash out the education fund, chances are you may be tempted to use the money for other emergencies or needs that may crop up in life.
Invest Child`s gifts for child only
Encourage grandparents or relatives who shower your children with gifts to consider opting for a cash contribution towards their education fund.
