How To Do A Children Education Planning

Submitted by: Rajendra Bhatia

As no child is similar and each family is unique, a common thought run deep in the heart of every parent – the desire of everyone is to give their children the best available education and see them develop into their full potential. However, our life is full of unexpected surprises and the path to achieve this desire may be a complicated one. That’s where a smart investment plan comes in. With flexibility in planning and a set of investment options that are available, you may help put your child on the journey to a valuable college degree. Following are some tips to start your children education planning effectively:

1. Creating a financial planning in mind

First of all, make an estimate of the expenses that will take place into your child’s education. Your cost should consider the inflation over the investment period or saving period. Now, with the estimate as a guide, you start uniting together your investment plan. There are too many education planning options available in the market today, each one with its own risks and benefits, which you may use alone or simultaneously in order to achieve your goals.

2. Set up an automatic system for regular investment

Set an action plan that makes investing or saving automatic. Many of the savings or investment plans often collect funds on regular basis like monthly, quarterly, half-annually which keeps our investment very much disciplined.

3. Reviewing the plan

Reviewing the plan on regular basis will definitely help you keep on track with your target goals. Review it at least once in a year and with every key life change such as new child, career progress or moving to a bigger house. Find different ways to reach your investment goal.

4. Top up according to your income

You could look out for increasing the amount of contribution on annual basis or top up your standard contributions when your income increases such as when you receive a bonus or a salary increment, in order to meet your earlier estimated target or to achieve an even larger fund.

5. AVOID DIPPING INTO THE FUNDS

Select a plan that locks in your funds for your children’s education till the time they are ready to go for higher education. If it is easy to cash out the education fund, possibilities are you may be tempted to use this money for other emergencies or circumstances that may occur in your life.

6. Promote contribution from family members

Encourage children s grandparents or relatives who shower your children with gifts to consider a cash contribution for building their education fund instead.

7. Encourage children for investments

Get even your children involved in saving for their education. When you are reviewing your investments for your children s education fund, have a talk with them about it and make them aware about the challenges and difficulties you face in saving for their education. If possible, let them contribute a small part of their pocket money to their education fund too. And before they go for higher education, help them build up good money management behavior to help them live within their means.

About the Author: Rajendra Bhatia (

aarthashastra.com

)-A Certified Financial Planner, Investment Advisor & CEO of Arthashastra Financial Planners,Located at Mumbai. Having more then 15 years of industry experience & a passion to create personalized,efficient & effective solutions in the space of personal Finance.

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