The cost of education has been skyrocketing for so many years already now. The amount you needed a decade ago for graduation fees is the amount you might require these days just to put your child in the 1st grade, given that the school is moderately equipped and trustworthy.
No matter how much we cut on spending, there are some milestones in life that are able to swallow all our savings. In this case, thoughtfully planned saving management, investment, and healthy spending habits can surely help.
If you already have a child/children, you should have already a blueprint of your investment plan. When you are planning to become a parent, the best time to start saving and investing is before you take care of your child.
Once you start, gauge the timeline. For example, if you will have a child in 2024, you may need a huge amount in the next 15 to 20 years considering higher education. Here are a few smart investment tips that will help you achieve this goal so far.
Start as Early as Possible – Factor in the Inflation
We understand you might have other purposes and liabilities too. You can accomplish multiple financial goals if done carefully. First of all, start investing as soon as possible after you start earning.
For that, you need to pay attention to see how much you actually save. Once you decide to have a child, or when your child is much younger, put ten to twenty years of a timeline while factoring in the inflation.
Considering all these aspects, you can decide an amount (approx) to achieve using the correct investment tools (MFs, SIPs, etc.). These days, you can also use an app or a digital platform to monitor your savings and
investments.
This might be a very effective way to deal with money matters if you’re tech-savvy and sound with finance.
- Consider Insurance
- Divide Your Goal Amount Into Smaller Parts
- Options for Investment
- Mutual Funds
- Sukanya Samridhi Yojana (for girls only)
Consider Insurance
While you plan for the future, don’t forget the possible uncertainties it can bring. Having health insurance as well as life insurance for you and your spouse will only assist you and your child in the future. God forbid if anything happens (accidentally, or because of illness) to you or your spouse, you should be able to depend upon the insurance instead of your current investment. Your investment for particular goals should ideally remain intact for the longest term possible.
Divide Your Goal Amount Into Smaller Parts
You can divide a big amount into smaller ones according to the timeline. Let’s say, you need 20 lacs in the next 10 years, you can try to achieve 5 lacs in the first couple of years and then keep going.
Options for Investment
There are zillions of investment options these days. Some of the youngsters have turned to cryptos and NFTs too. However, the best options in India are SIP and Mutual funds.
If you can commit a certain amount every month or every three months, SIP is a way to go. But if that is too much of a commitment for you, Mutual funds are a suitable option.
Mutual Funds
There are three types of mutual funds mainly, equity funds, balanced funds, and more basic ones. Large-cap, mid-cap, and small-cap funds are also to choose from. You can decide on the basis of your risk-taking capacity.
It is advisable to have a portfolio that is diversified and gives multiple interest rates. You can choose to invest in more than one mutual fund; a couple of funds from balanced funds and others can be equity ones.
Sukanya Samridhi Yojana (for girls only)
This one is an investment scheme supported by the Indian government. It is particularly curated for the parents of girls a child/children in India. One more way to faster savings is to have a side hustle, however, this one is not always an ideal way to opt.
All in all, a step-by-step investment plan and saving abilities can enable your child to access the best quality higher education, which is a dream of many today.
Author Bio: Naina Rajgopalan has a thing for numbers and a deep fascination to learn about
all things finance. She’s been money-wise from a young age and has always shared her
knowledge and tips with those around her. Being a part of the content team at Freo Save, a
digital savings account that offers up to 7% interest rate on savings along with benefits such
as insurance on balance, safe & secure banking, and so on. Naina stays updated with the
latest on what happens in the banking and fintech industries. She has taken upon herself to
share her knowledge with readers across all walks of life to help them manage their finances
and budgets better, so they can make better decisions while spending, borrowing, investing
and saving.
