“An investment in knowledge pays the best interest.” – Benjamin Franklin
This famous quote about education signifies the importance of planning for a child’s education. As a parent, you want the very best for your child when it comes to getting quality education. Given the rising cost of higher education in India, you might have felt the need to plan ahead for finances to support your child’s education. While saving money for educational needs is one way to go about this, it is not the only one for you to rely on. Investing money in one of the best child education plans is a better alternative that can help your child achieve the dreams of higher education without worrying about the cost factor.
You must begin planning for your child’s education as early as possible if you already have kids. If you feel you are not good at managing finances and investments, seek help from FinEdge, a renowned financial advisory firm to choose the best child education plan.
Here is a stepwise guide to planning for your child’s education:
- Do the Math
The wise men say it is impossible to achieve a goal you cannot imagine. The same holds true when you think of the cost of education quantitatively. Before you select the best child education plan, you must have a clear picture in mind about the number of years you have to save for or invest money, and the approximate amount you will need.
For instance, if you have enrolled your child in Nursery standard this year, you will have around 14-15 years to plan for his higher education. This time-horizon is an opportunity for you to grow your money and start investing in the right instruments. You should not wait till the last hour as this will most likely create unexpected chaos in terms of arranging the required amount.
- Start Investing Early
One of the primary reasons for investing in the best child education plan early on is to build a habit of putting money aside and bring discipline into the picture. It often happens that people tend to give the least importance to investments while being more inclined towards unnecessary expenses. By starting to invest early, you tend to cut on the unneeded expenses and diverting the money towards the right investment instruments.
Another benefit of investing early on is the improvement in your risk-taking capability. Alongside, you increase the probability of earning good returns till the time of your child’s higher education.
- Estimate the Cost of Education Precisely
Consider this example to understand the importance of education cost estimation –
Mr Jha has a 2-year old son, who will graduate after 16 years. He wants his son to become a doctor. Assuming the cost of pursuing MBBS in today’s terms in Rs. 7 Lakhs, then the approximate cost of child education 16 years from now will rise beyond Rs. 20 Lakhs, considering the rate of inflation. He needs to invest money accordingly to be able to fulfill this goal.
You need to think of the best child education plan, similarly, considering several factors like:
- Choice of stream
- Global or local exposure
- Current cost of educational courses in specific streams
- Rate of inflation
By doing this, you can get an estimate of the overall capital outflow, based on which you can start investment planning.
Invest Smartly for Your Child’s Higher Education
With the right investment decisions, you can let your child fulfil his dreams of higher education without jeopardizing your finances. To get advice on financial planning and asset allocation for your child’s higher education, you can connect with renowned financial advisory firms like FinEdge. Their team of experienced advisors will give you unbiased assistance to select the best child education plan.