Fund Your Child’s Future Education with a Financial Chart!

Today with the rising cost of education, funding your child’s future studies is no more a cake walk!

Achieving this goal smoothly is only possible with a right financial plan.

Our research has revealed that fees for some of the most reputed educational institutes like IIT, has increased by five times in the last decade. Similarly, fees for MBA admission in reputed colleges has also increased drastically.

While reputed educational institutes the likes of IIM and IIT charge a bomb to secure a seat even decent institutes charge no less than Rs 8 lakhs today. Given the current rise in educational costs, five years down the lane, this figure would atleast double up.

As shocking as these numbers sound, a financial chart will ensure that your child’s educational goals are met without the burden of an education loan. Remember, education loans are only meant to bridge the gap between your corpus and the requirement at the time, and must be considered as a last resort.

Here’s a complete financial chart that will provide you with a step-by-step guide to help you with your child’s educational plans and ensure that you are well informed about your next course of action to achieve your child investment goals.

Identification

Begin with identifying your child’s dream. Encouraging your child’s dream through positive reinforcement will help in solidifying their career goals.

It is better to encourage them to think about 3-4 different career options.

Financial Chart

Fund management is a skill set built on brains, sweat and tears. Keeping the investment amount in mind, the thumb rule is to create a separate portfolio for your child educational goals. If you have more than one child, make separate portfolios for them and allot fixed fund creation that can help them individually.

Next, identify milestones and create separate investment buckets for the educational costs that arise in each. Assign a regular savings plan for each, and monitor the corpus closely, and keep them untouched until absolutely necessary or to accomplish the goal in sight.

Finally, consider which investment option is most suitable for the milestones on your child investment plan

You can invest in ULIPs as it provides market linked returns as well as protection. Edelweiss Tokio Life – Wealth Plus has a rising star benefit which acts as a child plan. Under this benefit, if an unfortunate event of death occurs to the policyholder then a lumpsum amount will be provided to the nominee and all future premiums along with additional allocation will be credited immediately in the fund value chosen by the policyholder. This ensures that your child receives the sum assured as planned.

Bifurcation

The investment portfolio for child depends on the amount of time left to achieve them. For a child investment plan that is at least ten years away, the portfolio must lean on equities. ULIPs with equity fund options can be the mainstay of one’s portfolio. However, if the goal is nearer and you plan to invest for less than 10 years then it is advisable to invest in debt funds.

 

Aastha Mestry - Portfolio Manager          

An Author and a Full-Time Portfolio Manager, Aastha has 6 years of experience working in the Insurance Industry with businesses globally. With a profound interest in traveling, Aastha also loves to blog in her free time.