Even after Parents have spent their lives in poverty, but they wish that their children should be rich and poverty should not come to them. Parents can realize this dream by following some suggestions of financial planning. Just as you make your retirement planning or plan to buy a house, similarly it is also necessary to plan the financial future of children.
Follow these 3 steps
Decide the goal: Decide goals like Higher Education, School Tips, Vehicle, Business, Wedding, Property.
Decide the priority: Give your goals priority according to time and importance, so that the right goal can be focused at the right time.
Estimate future expenses: Assess future expenses keeping in mind the current cost and inflation.
Estimate future expenses
For example, if you want to send your daughter to a top business school after being graduated from college in 2034, you have to be financially ready. The current fee of two years MBA program in IIM Indore in 2025 is around ₹ 23 lakh. This fee has increased at a rate of 12% per year in the last two decades. In such a situation, by calculating, it is found that the same fee will be around ₹ 64 lakh in 2034. Similarly, parents must calculate future expenses based on the current cost for each goal.
Investment by goal
Savings accounts, FD, liquid and short term date funds can be used for immigate goals. At the same time, fixed income schemes like equity mutual funds, gold and Sukanya prosperity can be used simultaneously for long -term goals. Mutual fund SIP is also a good option.
How much should the return be
If general consumer inflation is increasing at a rate of about 5%, education inflation is increasing at a rate of about 8%. Therefore, you will need an investment option that can give equal or more returns to this inflation rate. Parents can invest more aggressively for long-term goals of 10, 12 or 15 years and can make their entire investment in equity.
This method will work
All family members-parents, grandparents, uncle-aunt-can contribute some amount to children’s education funds every month. Each person can contribute differently. Thus, a large amount accumulates slightly. In this way, the family together can create a good education fund for their children.
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