Education is the key to unlock the world and a passport to freedom, to be an independent person and is one element that helps earn respect and the most essential ingredient for a person’s successful Life.

Every parent would want to give their child the best when it comes to schooling and education so that no opportunity is lost and equipping your child with the best educational opportunities is always a priority.

However, it comes at a price. The cost of education world over is on a steep rise and let alone studying at premier institutes, even normal education calls for planning and managing expenses.

With the ever-rising costs for higher education, one must plan for the expenses when the child is young, which will give the time to accumulate a substantial amount of money when the child reaches higher classes or college.

How can this be achieved or in other words what is the best method to stack and save Money? With varied options of Investing – for a specific goal or a purpose – achieving every dream is made possible.

Of course, this does involve dedication, a bit of sacrifice and being ready to believe that investing wisely alone can make this happen.

Broad Investments for Planning for Children’s Higher Education

Choose the investment that offers a return above inflation over some time. Invest your money based on your risk appetite to accumulate the corpus for your kid’s higher education. You can stick to relatively safer financial instruments such as PPF or the NSC to collect money for your child’s higher education if you are risk averse.

However, an aggressive investor may choose to invest in equity-oriented investments that offer an attractive return on investment over the long-term.

The higher return offered by equity funds can reduce the amount of saving you set aside for your child’s education. Invest in equity mutual funds through SIP based on your risk tolerance and start investing when the child is three to five years of age.

You must calculate the amount you need for the child’s education as early as possible. It gives you the time to select the right investment and collect the money to send your child abroad for higher education.

Here are a few tips that would help understand how Planning for Children’s Higher Education can be done –

1. Deciding the time period: Even if the time period of the children’s education is not known accurately, it would help if the time horizon of your kid’s education is known approximately. The better you know the time horizon, the better you will be able to do financial planning.
2. Start planning well in advance: It is really important to plan everything well in advance and not to wait till the last moment. When you start planning and saving well in advance, it would ease the mental pressure
3. Estimate the costs: While planning – please estimate the cost of education that your kids have chosen to be a part of. When it comes to cost, it may differ depending on the course and place of education & this factor must be kept in mind which will aid planning.
4. List down your priorities: Listing down your current assets and liabilities would help. In this way, you can save a part to the current priorities and the other part to your kids’ education so that the current liabilities of yours are not affected and the education on the other side is also not affected.
5. Plan the time intervals of saving: It would help if you are planning to save in a proper time interval. For example, you can save a fixed amount per month or once in three months or per annum as per your comfort Or choose to invest in SIP’s.
6. Be prepared for any unexpected requirements: Sometimes, unplanned expenses especially for education could come up – this too will need to be provisioned.

Before preparing a financial plan for the child understanding their point of view and interests also plays a pivotal role.

It is recommended that the parents or extended family understands the child’s requirements, discuss in detail and then get to plan, which will help your children reach their goals. It is advisable to seek professional advice while planning to invest for children or have a through reading from alternate sources before you go all out to invest.

Today, there are multiple and tailor-made investment options that help reach your goals. So, plan well and give your children the best.