The cost of education in India is constantly increasing, due to people focusing more on investment to meet their children’s educational needs. In this post, you know how to invest in children’s education?
Nobody wants to bargain over their children’s studies. Everyone wants to provide a quality education for their children. The competition is currently very high and there is no guarantee that your children will be accepted into the preferred course or college. Therefore, your children will have to work hard.
How to invest in children’s education?
It is estimated that education expenditures will increase more than the average rate of inflation. This means that relying on investment in debt products to teach your child will not be enough. If you start investing in these products even 20 years from now, you won’t be able to raise enough money.
Each type of study has a different cost. Medicine, engineering, administration, teaching, etc. Each type of study has a different cost.
Learn how to save money for child education
The cost of education in India is constantly increasing, due to people focusing more on investment to meet their children’s educational needs.
While there is nothing more important than usually getting into your children’s savings as soon as possible, it is important to choose the right investment tools as well as continue to invest for a long time to make full preparations for this goal. is being.
If you’re still mired in thinking about how to start saving for your kids, let us know how to start with this:
Set a goal
Like any other personal finance issue, saving for education and investment also requires a specific goal. While education has become very expensive, our regular income can take care of it.
Higher education should be more financially focused, but when your child is ready to study in college or at that time, it is a little difficult to estimate how much money is needed for his higher education. But it is important to estimate this because you do not know the path your child will take and the cost of this course.
Savings and investment
If saving in your child’s education is your biggest priority, start saving to make a large sum. For this, make a list of all your income and expenses that should also include the repayment of your loan. This will help you know how much money you have to save.
Invest these savings in investment tools that can help increase your money. If you have a daughter, you can decide to invest in Sukanya Samriddhi Yojana, or you can also invest through PPF and Mutual Funds which can help you prepare a huge amount in the long run. Regular investment in a mutual fund is one of the best ways to invest in order to achieve a long-term goal, as it helps you to invest in a disciplined manner and achieve difficult goals.
Ensure that the investment maturity period corresponds to the time when your child will be ready for higher education. By investing for a longer period of time, you will be able to reduce your loan dependency and benefit from liquidity when needed.
Prepare for a loan
It can also decrease your college money. You can fill this gap by obtaining an education loan. While arranging funds to educate your children, do not ignore the needs related to your retirement, and also continue to invest in it. Regardless of this, because of the education loan, a feeling of financial responsibility for your child can arise when the work begins because at that time the burden of paying these debts will be on him.
Finally, review your investment plan periodically and make the necessary adjustments so that you can stay on track to achieve your goals.
For those who do not have time or do not want to invest directly in stocks, mutual funds are the best option. There are several reasons for this, such as:
- First, experienced fund managers invest on behalf of investors just like you after careful consideration, research, analysis, and discussion.
- Second, there is a lot of diversification in the portfolio of mutual funds, which receive protection in high-risk situations.
- Third, investing in a mutual fund provides flexibility or lead time for education funds.
- Fourth, long-term investment funds are good because they provide the highest returns in the long run, despite short-term fluctuations.
- Fifth, you can expect at least a 10-12% return on investment in a pure equity fund.
Create an educational fund in this way through mutual funds
- Create a small paper that parents work together
- Select the amount based on your ability and start SIP
- Review the amount of SIP once a year and raise it
- Asset allocation according to your investment
- Periodic review of performance and asset allocation from mutual fund investments (once a year)
- A few months before the SIP payment, deposit the required amount into a liquid box
Some important advice
How much should I save every month?
The amount that you save each month depends on your child’s age and the number of years left before you spend on their education. Given the rising costs of education in India, if you need this fund after 10 years, you will have to save more. If necessary after 15 years, relatively few savings are required. Use this calculator to teach the child more information.
What should be my goal?
It depends on how you want to teach your child. Make sure you have an amount in your mind before starting. For this, you first need to know the cost of your child’s education in India.
So friends, hope you liked this article and you got some new information. Please tell me in the comments.