Financial Planning For a Child’s Education

Financial Planning for a Child’s Education

Planning your child’s future is very important. And the Education is the most important expense for your child. Here are the few things that you should keep in mind before planning your child’s education fund.

- There are several Insurance products available in the market. But you should not go for any of them. This is because Insurance + Investment = Bad Combination. Rather than that, you should go for Mutual Fund Investing with separate life insurance policy.

- Simply Buy 4-star or 5-star rated mutual funds (According to Valueresearchonline.com) and start SIP rather than investing lump-sum  amount. Here are the 4 Step Simple Quick Guide for Planning your Child’s Financial Future.

01) Invest Early: This is very important. The compound interest is the greatest force in the universe. So if you start early than the compound interest will work more in favour of you to make you rich. And you will be able to build large corpus.

02) Choose Growth Option: Choose 4-star or 5-star rated mutual funds and always go for Growth option.

03) Go For SIP: Rather than Investing lump-sum amounts irregularly, it is advisable to invest small but regular amount of money.

04) Switch in Time: Just 3 years before your goal, You shift your fund from Equities to debt. This is because during last 3 years of your goal, your aim should be to protect the capital.

05) Never mix Insurance with Investment: Never go for Insurance products which offer your child’s financial future with investments.

THE COST OF EDUCATION IN FUTURE:

Always consider the inflation rate while planning your financial goals. Say for Example, if today the cost of sending a child to USA for Medicine degree is Rs.10 Lakhs than after 18 years it will become Rs.28 Lakhs or even more at the inflation rate of 6% per annum.

Summary -

Two things are very important for planning your child’s financial future.

01) Start Investing Early &

02) Inflation Rate Consideration.

If you can manage the above 2 factors than You are a Winner. Your Child can study in world’s Best Universities.