As a parent, one of the biggest responsibilities you will take on is to plan your child’s future. However, with the rising education costs in India, this task is becoming more challenging each year. Whether you want to send your child to a top engineering college, a medical school, or even abroad, the cost of higher education is climbing steadily. The best way to avoid this cost from becoming overwhelming is to plan early. There are practical steps you can take today to ensure your child’s education is secure tomorrow.
Understanding the Rising Education Costs in India
Before we learn ways to deal with it, we need to get a clear idea of the rising costs of education in the country.
- Increasing infrastructure, new advancements in technology, and high demand for certain courses have catapulted the tuition fees of many institutions today. With inflation rising, these costs are only bound to increase.
If your child is three years old today and you want to fund their college education 15 years from now, that cost could double or even triple.
While the macro-economic factors are beyond your control, you can take small steps on your end to ensure your child receives a high-quality education in the future without major financial worries.
Planning Your Child’s Future: One Step at a Time
Given the rising education costs in India, it is crucial for parents to plan ahead. Here are some strategies to help.
Start Early
To beat rising education costs, the most important thing you can do is start early. The earlier you begin saving and investing, the more time your money has to grow. Many parents delay investing until their child is in their teens. By then, time is limited, and the options to grow your funds at a solid rate are fewer.
Create a Clear Financial Plan
It is better to have a clear target than to shoot in the dark. To begin with, create a financial plan that covers your child’s schooling, college, and even postgraduate education. Use an investment calculator to estimate how much you need to save monthly to meet your goals. Many of these tools also factor in inflation and the time frame you have to help you get a realistic savings target.
Have a Separate Fund for Your Child’s Education
If possible, avoid mixing the funds you have kept for your child’s education with your regular savings or emergency fund. Consider setting up a dedicated savings account where you credit a certain amount every month. This can help prevent withdrawals for non-education needs and keep your focus on building the education corpus.
Choose the Right Child Investment Plan
For the uninitiated, a child investment plan is a financial product that helps you grow your money while keeping your child’s needs in mind. These plans are often structured to provide returns when needed, such as when the child is beginning their higher education. You also have flexibility in terms of premiums and payouts, so you can match the plan with your child’s education timeline. For instance, if your child will need a large amount in 10 years, a plan that allows for a withdrawal at that stage can be useful.
Secure with a Child Insurance Plan
While growing your savings is important, protecting your child’s future is equally critical. A child insurance plan can offer both investment benefits and life cover. If something happens to you, the plan continues to work for your child’s future. This way, your child will receive the promised benefits at the right time, regardless of any unfortunate events.
Even if you already have a life insurance plan, a child insurance plan can be a good option. It can create an additional level of protection for your child’s future in addition to security for your other loved ones.
Before you finalise a plan, consider using a child insurance plan calculator to compare plans based on your budget, coverage, and other features.
Review and Adjust Annually
As your life and financial goals change, so should your investment strategy. Make it a habit to review your child’s investment portfolio at least once a year. If your income has increased, consider stepping up your contributions. If you are closer to the goal year, think about shifting from high-risk investments (like equity) to safer ones (like debt or balanced funds) in your child investment plan. By carrying out annual reviews, you can stay on track and make timely corrections as needed.
The rising education cost in India is a reality every parent must face. But with the right planning, you and your little one can be ready at the right time. The best way is to start early and invest wisely. Remember to protect your child’s future through a solid mix of growth-focused investments and life insurance. Use tools such as the investment calculator to create clear goals and lead with clarity.
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