How to Plan Your Child's Education - A Step by Step Guide
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How to Plan Your Child's Education - A Step by Step Guide

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  • 26th Apr 2022
  • 2,569

 How to Plan Your Child's Education - A Step by Step Guide

Starting early is the key to building a significant education fund for your children. Along with an early start, diversification of your investment portfolio is also important so that you do not miss out on the financial goals you have set for your children’s education. The sooner you start investing in your child’s education fund, the larger the corpus will become and help your child fulfill their dreams without financial woe.

Easy to Follow Steps to Plan your Child’s Education

Planning education finance, especially for your children, can be a tough task and, at the same time, a highly tricky move. You are unaware of various factors that might influence the education of your little one in future years. However, the best you can do is save enough for your children’s education so that they never have to compromise on education and educational choices due to financial problems in the future.

1. Assess where you stand financially

It must be clear that it is not wise to invest if you are cutting costs from your basic needs like food, shelter, and other necessary expenses, including health and medicine.

Thus, it is important to analyze where you stand financially. It is suggested to take out an estimate of your income and all the current and future assets. Once you know your financial resources, you can plan your next move accordingly without compromising your present goals.

2. Finalize a corpus amount

Once you know your current financial status, you can easily finalize the corpus amount you want to secure for your child’s education based on the current inflation rate. Once you have considered all these factors, it’s time to identify your child’s financial requirements based on his current age and what he will require in the future.

How To Plan Finances for Your Child's Education - A Step by Step Guide

3. Have a plan of action in case of parental absence

With the pace at which the world is moving today, we have no idea what comes next. Thus, experts advise that a plan of action must be ready for your child in case of your absence or an untimely demise.

Many investment options can lure you towards them for planning education finance. However, plans like ULIP are highly flexible and will help you set a firm plan of action for your child’s education finance.

4. Opt for a child investment plan that offers the best returns and multiple benefits.

Once you are clear about your current financial status, your financial requirements, and your child’s financial requirements, it is time to choose the right investment option for your child.

Education planning/financial planning is a little tricky. First, you will have to choose a suitable child insurance plan like ULIPs that cater properly to your children’s educational needs. In addition to this, ULIPs also offer waiver premiums in case of parents’ demise. The only thing that you need to understand is that your investment is going in sync with the market trends and their growth.

We all know that from primary school to college, education costs are soaring to new heights every day. The above-mentioned important steps will help you efficiently plan education finance for your child’s future, even in your absence.

- A Consumer Education Initiative series by Kotak Life

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