Education is the key to turn a weakness into a strength.
As parents you want to give the best for your children. Perhaps the top most priority for you is to provide your son or daughter a quality education. As we all know that good education is the process of facilitating learning, or the acquisition of knowledge, skills, values, morals, beliefs and habits which provides social and material needs. However, this is easier said than done. You need to plan in advance, both financially and mentally, for your children’s future.
Rising Cost of Inflation for Education
Cost of education is going up every year due to inflation and increase in prices. Though government institutions like IITs, IIMs, IISc etc., are the first choice for higher education in India owing to their quality and brand, their limited number of seats force a majority of students to study in private institutions where costs may be higher. Hence, it is important that while planning for the future one needs to keep in mind the higher fees of private colleges.
Planning to study abroad?
Many parents these days dream to send their children abroad for higher education. These means higher costs for study abroad which will not only grow with inflation but will also rise if the rupee depreciates. Needless to mention, the earlier you start planning, the better it is.
Hobbies?
Remember, an education doesn’t just refer to the hours your child spends in school. The tuition fees you pay is only a part of the expenses that come attached with a good education. You will also need money to pay for any special classes or hobbies your child would like to explore. For example, your child might show interest in a sport like tennis. You should also factor in the cost of potential tennis lessons, the cost of buying racquets, balls specialised shoes and more.
You can meet this goal with a meticulously planned and diversified investment plan between risky and safe instruments.
The biggest threat to your child’s aspirations is the absence of their parents. Considering they are financially dependent on you; the death or disability of a parent can derail their future aspirations. So, it is absolutely mandatory that you buy term and health insurance. In fact, every time a family member is added, or your income grows significantly, it is pertinent that you must review your protection needs.
Inculcating good financial habits is important so that your kids are well-equipped in managing their own money after a certain age. Setting monthly pocket money, teaching them budgeting and taxation are some vital lessons they must learn at a younger age. They can learn how to save money, invest money and compound money to overcome their future needs.
To summarize, the key to planning for your child’s future is investing early and letting your money earn for you over a longer period of time.
