Investing For a Child Education is Better than Taking the Loan for the Same
Education is one of the best levers to make this world a better place. Famous entrepreneur and CEO of Apple Inc. Steve Jobs once said, “The best thing that could happen to me was that my parents had put me in a school.” From Thomas Elva Edison to Albert Einstein and from Mark Zuckerberg to Bill Gates, all of them had credited education for their success.
In India, primary education is a fundamental right. It implies that the Government is bound by the constitution of the country to provide free education for the children of the age group of 6 to 14 years. Before the other Indian States catch up with the standards of New Delhi’s Primary education, you have to rely on private education. Similar is the scenario in Graduation & Higher education.
No doubt, every parent wants the best education for their children, but the costs are a major concern. The best school in your city may remain a dream. The same can be true about the graduation college, maybe your child has a dream to be a graduate from a foreign university and he qualifies for that too. What if you don’t have enough money to fund his/her education? This can destroy the entire career of your loved one. These are several milestones that you have to cross to shape your child’s future, and planning for their education in the best possible way is the one among them.
1. Remember the important milestone dates
2. Evaluate the current cost of education.
3. Decide the amount that you would like to spend.
4. Calculate the return you can get.
5. Calculate your monthly contribution.
Steps to Achieve Your Financial Goal
Buy an insurance policy
Only if you are healthy, you can work towards your child achieving her dreams. Therefore, first, think of yourself. You should buy a health insurance policy. There are two benefits of it; first, it keeps you fit for your family and second, it doesn't let you burn your savings. Health insurance policies are tax saving options too.
Start Saving Early
No one can beat the early birds. The sooner you start saving for your kid(s), the better it is. The whole idea is to create sizeable equity as per the requirement calculated. Make sure the savings amount is in direct proportion to salary. Factor-in the inflation. It will ensure that when your child enters college education, you have the requisite funds.
Choose the right investment portfolio
It's not about savings; it's also about the parking of funds in the right investment matrix plan. Here are a few options that you can think of while saving money for your kids' education.
Mutual Funds
They are one of the best instruments to see your money multiplying. Often the investors think that investing in mutual funds is short term investment plans. No, it isn't the case. Mutual funds are long term investment options. Often investors assume that mutual funds are short term investment plans. No, it isn't the case. They are long term investment options. Child Education Planning In Jaipur is a very important part of your Financial Planning.
ULIPs
Unit Linked Insurance Policies (ULIPs) provide security cover and offer the potential for wealth creation. In ULIPs, a part of the premium is parked towards your Life Cover and the rest is invested in various market-linked equity schemes.
The returns on your investments depend upon the performance of the funds opted.
Through ULIPs, you can save substantial money for your kids' education. One should plan it in a manner that on important milestones in your kids' life, you get payback from them.
Term Insurance
Imagine the plight of a family that loses its earning member before he/she could fulfill the responsibilities like kids education, marriage, or taking care of spouse in the old age.
In such cases, Term Insurance provides the much-needed support to the family of the policyholder as it receives the entire sum assured as opted by the policyholder.
Opting for the term insurance at an early age has many benefits. The entire family gets an umbrella of financial security, & the premium is less. Therefore, Term insurance is one of the most advised solutions in case of any eventuality.
PPF for Your Child
Public provident fund (PPF) It is one of the time tested instruments to save money for your kids' education. PPF has a 15-years lock-in-period. However, you can also withdraw partially the amount after the sixth year from this account. One more benefit of this plan is that when your child becomes adult they can also contribute to the same account. One can opt for it from a post office or any bank. It enables you to create tax-free savings for your kid’s future.
Summary
The part of life's uncertainty can be met with a solid action plan. Let money not pose any hindrance to your child's education. Whichever investment matrix you choose, just on having a regular look on it. Keep watching the fund’s performance; take the advice of your financial planner in Jaipur, he is the best guy suited for it. Often people advise taking bank loans for children's higher education. This can be another option. However, it should be the last resort. Plan to use your own funds & for that, save regularly. It is like seeing the seed turning into the tree.
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