How do I plan for my child’s education?
/2015-07-14 13:21:29
Rachita Maheshwari

All parents- new and old are always asking themselves and friends these questions- “How do I plan for my child’s education?” and “Am I doing enough?”

Today, we’ll discuss the 5 things you must do irrespective of the fact that you have planned long back or are just starting to plan; if you started planning early or late.

First “Set the goal”- What is the goal- how much do you want as a lumpsum or in parts, when do you need it? Is it an overseas education, how do keep track of currencies, do you need to hedge it? If yes, when? There are a lot of questions you need to answer. The more the questions, the more clarity there will be when you are closer to the goal. If you have a young child- below 5, you are starting early. People often ask me, “I have a 3 month old child, which insurance policy do I invest in?” and the like, and I ask them lots of questions- some of them don’t come back- may be they are intimidated or may be they think “If I do all the answering, what will they do?” Frankly, I don’t know what they think, although I’d love to know. Especially if I scared them away! But seriously, talk about these things and there will be more clarity and the more you are able to visualize the goal- the easier it gets to achieve it.

Account for inflation: Inflation in education costs is almost double the regular number. Account for this when you plan your goal. Ideally, take the number in today’s value and then account for inflation, it should give you a clearer picture.

Protect the goal: What if you’re not around? What if you are not in a good state of health? What ifs shouldn’t prevent the goals of your children be hampered. You must provide for the “What if” Scenarios as well. A term cover protecting the goal is a good start.

Invest systematically: Don’t wait till your salary or savings reach a particular number before you start investing. Start- even if it’s a small amount- the key is to start and to keep investing. Discipline is the best virtue when it comes to investing albeit may sound boring .The sooner you start the better it works.

Track regularly: Don’t forget to track the investments regularly. The portfolio needs to be in line with your goal and risk profile.

So, when are you starting?