Why savings is important? Simply because the future cannot be predicted. Thus, it is imperative to save money for the future. The reason to save money can vary from person to person based on their financial objective. One can save to provide financial security to their children, while others can save to create a retirement fund or to achieve short-term objectives of life.
If we talk about the financial security of children then having good savings has become important than ever before. Nowadays, with the skyrocketing cost of education fees and growing inflation, it is a must to invest in the best savings plan for the child. Thus, to avoid any type of financial burden on your children make sure that you start right from the time when your child is born. You can follow these simple tips to save for your child’s secure future.
Before creating any financial plan or before making any investment make sure that you make a proper evaluation of the needs of your children. Once you evaluate the needs of the child, plan accordingly to save for it. Try to achieve the different financial objectives that your child will require with the growing age. A proper evaluation of how much funds you will need until your child grows up will help you to create a strong financial cushion for your child.
For example, Mr. Gupta has a son who is 3 years old. He will do his graduation after 15 years. The cost of graduation in today’s term is Rs.5 lakh. By taking the rate of inflation of 10% per annum, after 15 years Mr. Gupta will have to pay Rs. 20.88 lakh for his son's graduation. If Mr. Gupat starts investing now then he will have to invest Rs. 4,180 per month whereas if he plans to invest after 5 years then this amount will increase and he will have to invest Rs. 9,079 per month i.e. almost double the amount. Thus by investing earlier, you will be able to create a strong financial backup for your child at the correct time.
If you want to gain high returns then saving in your savings bank account is not sufficient. You should consider investing in the different investment options available in the market and choose the investment option based on factors like time period, risk appetite, future objectives, etc. to make your portfolio work towards the financial goal that you have set.
To secure the financial future of the child you can choose to invest in the best saving plan for child available in the market. Moreover, you can invest in the child insurance plans offered by different insurance companies as per your requirement and suitability. With the help of a child savings plan, you will be able to achieve the financial goal that you have set for your child. However, before making any investment it is important to understand these products precisely and evaluate the viability and characteristics of these products.
When it comes to securing the financial future of the child, it is always advised to save for the long term. If you start saving right from the time when your child in small then you can create a financial cushion for your child in the long-term. Moreover, you can create a sustainable financial backup for your child so that he can achieve the major objectives of life.
Inflation is one of the most important factors to consider while doing financial planning for your child. Before investing in a specific plan or while saving make sure that you factor the inflation rate. By keeping in mind the growing rate of inflation, calculate the amount you would require in the future for the upbringing of your children. Based on your estimation, try to save for your child so that in the long run you have ample accumulated funds to deal with the growing inflation. Also, make sure that you keep aside some of the funds to deal with any type of medical emergency or any other emergency.
To create a strong financial portfolio and to save in the right manner you can take help from the financial experts. Financial planners will help you make the right investment choice and will also guide you in the process of financial planning.
It is a fact that life changes radically after the arrival of a baby. For every parent, the wellbeing of the children is the utmost priority. Even though most of the parents want to fulfill the dream of their child of a secured career, it is a difficult goal to achieve without proper financial planning and the right investment. In this era of innovation and competition it is extremely important to provide your child the best guidance and support practically and financially. Thus, it is important to follow these simple tips to create a foolproof financial backup for the secure future of your child.