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Saving And Investment Tips For Higher Education Of Children
It is easier said than done though, because it is an increasingly competitive world that we live in and parents are always trying to provide more and more for their children. Meeting your goal of providing your child the future that he or she deserves requires early and intricate planning, dedicated devotion to the goal and taking calculated risks to generate returns that will help finance their needs when the time comes.
Many believe, and rightly so that a strong education is critical to your child's secure future because it is the platform that they can use to find new avenues and become successful. Education costs and tuition fees are ever rising and preparing for these expenses early can help you manage the costs of raising your child and securing a bright future. So what can you do as a parent?
Start by insuring yourself. No matter how well you save, insuring yourself against life's uncertainties is a must. Your insurance policy acts as the second roof for your dependents. Not only will such a scheme would help meet your child's educational needs that would otherwise be hard to cover in the absence of insurance, but some child plans also offer a fixed amount for higher education once the child attains the age which takes care of his higher education costs.
To accurately plan your child's education expenses by planning and having a sound investment strategy for investing in your child's education is extremely important. Diversify your investment across various asset classes and financial instruments. This will help ensure that if one or more of your investments do not give you the returns that you anticipated, other investments may outperform and your overall investment gives you the returns that you expected. You can also reduce risk by taking away investments from high-risk products to a safer option when your long term investment plans are at the brink of maturity.
There are also long term fixed deposits, SIP mutual funds, Unit Linked Insurance Plans (ULIP), NSC etc. that you can invest systematically in. These investments will provide good returns over a sustained period of time. Investing a portion of your savings in instruments like these will help meet the long term targets and are ideal for your child's college education if you start investing systematically when your child is still a toddler. PPF is another scheme that will help for your child's future as it locks the amount invested for 15 years giving a good sum at maturity along with interest. PPF offers a compounded interest and hence is one of the best savings option. However, if you are expecting a big expense before your child is old enough to go to college, consider recurring deposits to help these expenses. Make your children financially aware and teach them the importance of limiting unnecessary frivolities. Inculcating saving habits from a young age will go a long way in preparing them to achieve their dreams in life!
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Francis Rodrigues
Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.
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HDFC Life
Reviewed by Life Insurance Experts
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