Why do we save? Simply because we can't predict the future. Therefore, the need to save money for the future is indispensable. Reasons for saving money vary from person to person as per their objectives. Some save for retirement, some for a new car or a house, some for vacations and likewise. Nowadays, people are becoming more concerned about the future of their children and they should be because of the skyrocketing tuition fees of schools & colleges. So, if you don't want to worry later on then start planning and saving to make the future of your children secure.
Methods to Save Money for Child:
- Evaluate your children's future needs: You should consider and evaluate the needs of your children before preparing any financial plan. After evaluating this, start chasing those needs-based objectives. There can be some expenses which may arise in future so you should forecast them as well.
- Start early to save more and invest less: For instance, Mr. Arora has a son who is 3 years old. His son will do his graduation after 15 years. In today's terms, the cost of graduation is Rs 5 lakhs. Take inflation rate to be 10% per annum. So, after 15 years, Mr. Arora will need Rs 20.88 lakhs for his son's graduation. If he starts investing now then he needs to invest Rs 4,180 per month but if he delays the investment and starts investing after over 5 years from now then he needs to invest Rs 9,079 i.e. almost double.
Hence you can easily observe the benefit of investing earlier to achieve the same amount of money at the correct time.
- Saving alone is not sufficient: If you want to earn high returns than saving money in your savings bank account is not the option. You should consider various investment options available in the market and choose the best suited to make your portfolio progress towards the financial goals you have set.
Many companies have launched various Child Insurance products. These investment products take care of most of the expenses along with an insurance cover. It is important to understand these products precisely before hawking for them blindly. Don't get carried away by the names of financial products. Instead, before making any decision, evaluate the characteristics & viability of these products.
- Take help from an expert financial planner: Apart from the child's future, there are other priorities as well like retirement, medical expenses, housing rent, etc. You should never dip into the funds save for these priorities to invest for your child. Planning better would be sensible and for that you can take help from an expert financial planner.
By following these simple but effective methods, you can easily make the future of your children secure.
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