About Child Future Planning
The arrival of a child brings in a lot of happiness. At the same time it also brings along many responsibilities. All of us are responsible when it comes to our children, but uncertainty could collapse the financial health of a family any time. It is sensible to save money for the children’s future and keep them financially secure even during our absence. So steps must be taken to ensure that this does not just end up in a dream.
Raising a child is no child’s play 65% of the parent’s spent over a half of their yearly income of their child education and extra co-curricular activities
As parent we may not control of our child dreams. The can be to become a rocket scientist or the next ‘Indian Idol’. We can never know what fuels their imagination and what plans do they make for themselves.
As parents, all we can do is back their dreams & provide financial support whenever needed. This is why we have to start planning early for our kids
Increasing Cost
Current College costs range from Rs 3-9L every year in India and Rs 40-50L in the US (including hostel, books, and fees.) And these costs are increasing annually at about 10% in India and 3% in the US.
Inflexible Timeline
Unlike other financial goals, there cannot be any change in the timelines because the joining date cannot be changed. Today the courses, institutes and countries where our children may want to study are numerous. As parents, we want to be financially prepared for our children's dreams.
Benefit of Long Term Goal
As investing for a child’s education is a long term goal, thankfully you can harness the alpha that equity offers to achieve higher, inflation beating returns. A few years before the due date, the funds will be systematically transferred to safer debt instruments.
Start Planning
There are two important numbers to consider: the future value of the goal and the time at hand. Say your child is going to start college ten years from now. Get a rough idea of two options: attending a private University in India or studying in the US. Kindly refer to the table below.