Aug 04, 2016 340

How to Make Your Child’s Higher Education More Affordable for You ?

A recent survey conducted by a leading Indian Daily has provided a few striking reports. Some of them are as follows:

*Parents spend around 40% of their income on their child’s education.

*The tuition fees in private schools have increased around 150% in the past ten years.

*The cost of education in India is rising at 10% to 12% every year.

What do you think is the reason behind this?

Most of you would say that the quality of education has been uplifted as a result of globalization on education. Added to that, the ever increasing price of commodities has contributed to the overall increase of the education cost in India. Yes...What you think is correct. INFLATION (and to some extent globalization as well) is THE culprit behind this skyrocketing education cost in our country.

If This is a Problem, There must Be a Solution As Well

There is a solution to every problem, provided you know where to look for it. When inflation is a problem, the only solution is to get a shield for your wealth. If you can protect your wealth from the adverse effects of inflation, your wealth will not only remain secure but also will grow, in the long run. In a nutshell, a robust financial planning is what you need to beat inflation

How can you protect and grow your wealth?

Financial Planning, as already said, is the best way to keep your hard-earned money secure and growing. Hence, both savings and investments should be incorporated in your financial planning, especially when your child’s education is your priority.

A step-by-step guide on financial planning for your child’s future

The first and the most crucial step of any planning is to set a goal to achieve. In case of financial planning too, you need to set a goal first. Your financial goal would represent the amount of money you must have, at the end of a certain period of time.

Step I: Child Education Planner Tool

A Child education cost planning calculator is an online tool offered by almost all good life Insurance companies, free of cost. So, start with a child education planner to know how much money you need to save, for your child’s higher education. You just have to provide a few information like your child’s age, at what age your child would need the money, and the preferred stream of education. Based on the information you provide, the calculator will give you the estimated amount you need to have, by the time your child is ready to take up his/her higher studies.

Step II: Find a good Child Insurance Plan

No matter how much money you contribute to your savings account every month, a child education planning remains incomplete without a child plan offered by life insurance companies. A child plan promises to provide an all-round financial security to your child.

There are subtle differences between the different types of child plans offered by the Life Insurance Companies in India. While child education plans are out and out education plans, child insurance plans take care of the various financial needs in your child’s life. Child education plans generally offer the maturity benefit in a lump sum, whereas child insurance plans pay out the maturity benefit over a period of four to five years. Moreover, you can also choose from unit-linked and non-linked child plans depending on your financial goal and risk appetite. It is, therefore, very important to do your research and find the right child plan that suits your needs.

Step III: Start investing in the Child Plan as early as possible

The earlier you start investing in a child plan, the better return you will receive at the end of the policy. The best part of child insurance plans is that, it takes off the burden of premium payment from your family in case of your untimely death. Additionally, it pays out the death benefit to meet the financial needs of your child in your absence. Moreover, the amount of money your child will receive as the maturity benefit will be sufficient to bear the cost of his/her higher education easily.

The Above Steps Are Almost Crucial to a Successful Child Education Planning

The importance of child education plans is undeniable in your financial planning. Such plans help you shed the burden of worries regarding your child’s higher studies, especially in a time of price hike in the education industry. So, if you can keep yourself financially prepared, it will be easier for you to fulfill all your child’s dreams in future.