Ways To Save For Your Child’s Education

Education is the only key to a golden future and today’s parents are very well acquainted with the fact that the right education is the key to success. Everyone wants to send their children to the best institutions so that their children don’t lag behind anyone in the long run. Quality education comes with a good institution and with the privatization of education, education has become costlier. 

Schools and colleges’ fees are touching the sky but with the fact that it will all be worth it in the future, parents don’t hesitate in spending their life savings for education costs but it is well known that if the finances are not well planned, the child might miss from attending one of the best B-Schools or the best university despite having the best scores. Therefore saving for your child’s education is the first step towards their bright career. 

Ways To Save For Your Child’s Education

A well planned future backed with financial stability will help your children get the best quality education hence it is advised that you start saving and investing your money from a very early stage in life so that when a huge sum of money is needed, you have your savings for your rescue. Here are some ways to save for your child’s education-

1. Buy a Child Plan

Life insurance plans are the best policies to invest into when it comes to securing the future of your loved ones. Investing into Life Insurance Policies which cover the education costs of your children is a great investment if your child is aiming to study in a college that would charge a fee as high as 5 times your annual income. Such plans are known as Child Plans. It is suggested that you take a policy worth 10 times your income and if it does not cover the education costs, prefer changing the plan or adding a rider. 

2. Invest Into Assets Like Real Estate

Real estate assets hardly face depreciation, their value increases heavily with time. If you invest into assets like real estate early into your career, when your children grow up and would require a great sum of money to study abroad, you can sell out the land or holding and get around 30 to 40 times more than the cost price you had acquired it into. Nothing can be as profitable as real estate if there are no legal hassles. 

3. Invest Into Your Public Provident Fund Account

Public Provident Fund or PPF is the only investment every working professional generally invests into. It is a low-risk option that is tax-free upon withdrawal. The returns are lower, but they are predictable making it a safer and reliable option. Nevertheless, there is a cap on the amount of funds that can be invested through such a pathway – the maximum annual limit is Rs. 1,50,000. PPFs are also less suitable when an investor is willing to take on more risk and invest in business funds.

4. Invest Into Mutual Funds

Financial planning to build a corpus fund for a specific goal has grown in popularity over the last decade or so. Investing into education is also a part. Constructing a retirement income is very prevalent, and a small proportion of investors are also parents who want to save for their children's education. SIPs that enable you to invest monthly may provide better returns than one-time/lump sum investment mutual funds, especially over significantly longer durations. 

Takeaway

Saving for your child’s education is one of the wisest decisions you can make as a parent. This will not only secure your child’s future but also help you fulfil your responsibility as a good parent. Have a look at the above mentioned ways of saving and start investing from today.

Must Read: Tips To Purchase Child Plan

List of Top 5 Child Plans In India 2021 

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.