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Preparing your child for future and making him/her a responsible and good human, the first and foremost step towards this journey is giving your child the best education. As a parent, you always want to give the best available things to your child. You never want to compromise on anything and everything, be it food, clothes, other facilities and education. You always want to send your child to the best school and college. Your child's first day to school is very important and memorable for you. Before sending your kid to school you check everything, which is required during his/her first day to school.
In recent years, the school fee and college fee have increased manifolds. Earlier, getting school or college education was not an expensive affair, but today you shell huge amount to give your child basic and higher education. Considering the high inflation rate of school and college fee, you should also get future ready to fund your child's education. Here are five useful steps to get ready for your child's education.
Calculate the estimated amount required: It is really important that you should calculate the estimated amount you will require at different stages to fund your child's education. You should also consider the inflation rate while making such calculations for future amount. You should always make financial plans keeping the inflation and future cost in mind, not with the present cost. You can calculate the amount by using this formula:
Amount needed = Current assessed value x (1+ inflation rate considered) raised to the power of (Tenure)
If you are planning to make investments for your child's education or higher education, always ensure that you are calculating the invested amount keeping the inflation rate in mind. Once you get the invested value, you can convert that in simple EMIs to start investing in simple steps.
Plan in advance: After calculating the desired amount, you need to invest for your child's education. Now it is important to make a proper investment path. You should decide whether you are going to invest on monthly, quarterly, half-yearly or yearly basis. The best idea is to make monthly investments as it will not create much of difference in your monthly spending. It will not increase your burden as well. If your monthly investments, tenure and interest rate are in good sink, you will receive an amount after completion of tenure, which will be very close to your required amount. Therefore, advance planning is really important to achieve your future financial goals. Making small calculated investments can result into a good amount in the future.
Compare the different investment plans: Before finalising any investment plan to secure your child's education with a good child plan. You should set a goal for investment be it your child's education or marriage. It is important that you evaluate and compare all the different plans and make a well calculated decision. While making investments always keep few things in mind like inflation, achievement goals, risks linked with your investments, etc. Therefore, you should always make investments in different plans and areas to get better returns on investments.
Ensure your plan will offer you risk cover: While buying any investment plan, always ensure that your plan will give you risk cover as well. You should always clear this in advance in case of any unexpected situation your child's education and your assured some will not get affected.
Manage your plans well: After investing in any of the plans, always monitor and keep a check on your investments. You should always check how your funds are growing and performing. Always make sure that you know that what will be your return and assured some after maturity of the plan. Monitoring your plan will help you to assess your investments and will help you in deciding the ideal time to rebalance your investments.