Top 4 Ways to Save For Your Child's Education. | Aviva India

Top 4 Ways to Save For Your Child's Education.

Saving and investing money becomes easier for parents when they have a goal in mind. One of the most important goals for parents is their children's education. It is one of the largest cash outflows to consider for a family, and with the expense of schooling in India rising rapidly, it could be a concern for most parents.

 

What is the education inflation rate?

 

The education inflation rate is a measure of how quickly educational costs have risen over time. In India, education inflation is currently at 10-12 percent, which is more than double that of the economy’s inflation.

 

Regardless of the increasing inflation rate along with the expenses for education, most parents often find themselves heading to banks to take education loans. This might not always seem like a wise advice as you get an additional obligation of interest repayments. So how should you as a parent save for your child’s education? Let us see that in the following section.

 

Top 4 Ways to Save For Your Child's Education.

 

It is best to start saving for your children's college tuition as early as possible. But, before you start saving money, be sure to have a plan in place.

 

Preparing for college, like any other large expense, necessitates financial forethought, so here are 4 definitive ways to assist you in this journey:

 

1. Make a plan for your child's education:

A child education plan may be one of your greatest options if you're seeking a methodical way to invest in your child's education. A child education plan is a hybrid investing strategy that allows you to be both financially secure and fund your child's education. Such plans secure your children and ensure that their future is well-protected in the event of your untimely death. It also facilitates building up a corpus that may be used to fund pivotal moments and goals in their life.

 

You might think, but what if something happens and I’m not around? Most child plans offer the child a policy premium waiver in exchange for a lump sum payment in the event of the parent's death. After the death of a parent, the company continues to invest money on behalf of the policyholder, guaranteeing that your child's goals and future are bright and safe.

 

2. Examine and Reduce Unnecessary Expenses:

One of the most important strategies to attain your financial goals is to save wisely. When creating an investment strategy for your child's education, keep track of all of your monthly expenses and eliminate any superfluous spending. You can do so by keeping track of all of your expenses for a few months and determining which ones you can eliminate. This will enable you to save more effectively and efficiently. This does not mean you forget to enjoy too, after all life is about living in the moment too!

 

3. Begin putting some amount of money aside early on:

Another simple but crucial recommendation is to begin saving as soon as possible for your child's education. One of the most significant advantages of starting to save early is that you will have at least 10-12 years to save for their higher education, which is typically quite expensive. Starting early will not only provide you peace of mind but also give you a larger range of investment vehicles to pick from as your annual investment burden will be lower. Since you have a longer time horizon, you can invest in a variety of medium to higher risk investment vehicles, which may help you save more quickly.

 

4. Consider the Increasing Cost of Education:

When it comes to investing for your children's education, one of the most significant investment advice is to consider the rising cost of education in the country. From the expense of attending school to the cost of higher education, all the expenses are rapidly rising, and you must account for this when determining how much you will save and invest for your child's future. As a result, when calculating the true worth of what you are saving today, you must account for this rising cost- in short, don’t miss out considering the time value of your money!

 

The guru mantra here is to plan early, invest wisely and watch your child grow up to become the person of their dreams! If a Child Education Plan can give you all this, why wait?

 

 

AN AN May 21/22

 

 

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