With the always increasing inflation, the rates of day to day commodities are on a rise. Keeping this in mind we get into the habit of saving funds for our long term as well as short term financial needs. One important component to save for is your child’s education. Now-a-days providing your child with best educational facilities available is every parent’s number one priority. Many take education loan to do so but even other than that there are many additional or hidden expenses when it comes to paying for your child’s college education. The expenses can range more lakhs to crores depending on which career path your child chooses. You surely don’t want your child to compromise his or her career dreams just because you are unable to bare the college expenses. Thus we suggest you to start saving for your child’s college expense.
When to start?
There is no ‘start date’ to start saving for your child’s future. You can start saving for a college fund for your child is he or is in school or is just born. The sooner you start saving, the better. You will be in hold of more funds when your child enrolls in a college.
Don’t forget to do approximate research
At very early stage you surely don’t know which career path your child will chose thus you will be oblivious to the fact that how much money you need to save. So do some research about how much college education costs right now and how much it will cost in the future? Take an average amount by comparing various courses and institution or plan to save 10% extra than you needed to complete your college education.
For what duration you need to save?
College education in India ranges from 5 to 7 years. In foreign Universities it goes up to 10 years if your child chooses the medical field or decides to do a PhD. So you will need to save for approximately 5 to 7 years of college fees and other expenses for your child.
Where to save?
As per your time line, you should start saving funds under SIPs in large cap, multi cap and mid-cap mutual funds to gain combined interest rates. These combined interest rates will result in positive profits in the future.
If you follow this plan by the time your child enrolls in college you will be able to pay for the basic expenses and initial fees. For the remaining amount you can always choose education loan.
Or you can also pay your child’s fees by opting for LAP.
