A new chapter begins in your life when you become a parent. You realize how much love and care you have been holding in your heart – ready to shower on your baby. You want the best for your child — clothes, food, education and future.
Starting early is the key
Starting early is the first step for a successful future. You may not know but some people start planning before the baby is born. Such early starts help in accumulating sufficient funds and choosing better options for the child plan. Moreover, the earlier you start saving or investing, the more capital you acquire for the coming years.
You can begin by selecting the best school and college where your child can take admission later. Accordingly, you can invest and save money sooner. Equities and PPFs generate a good return if you plan for longer duration.
Calculate the cost and plan accordingly
Though you cannot calculate the right amount that will be required in future, you can always estimate it. For instance, you can check the average fees of popular schools and colleges and then plan to invest. During this process, do not forget to consider factors like inflation that can have significant impact on your child’s future plan.
According to a report, annual inflation in the education sector is 10-12 percent. In such a scenario, an engineering course which costs around 10 lakhs at present will be no less than 30 lakhs after 20 years. And even though education loans are available in the market, it is always a better choice to self-fund your child’s education. For this, you will need to begin planning now. Once you have calculated the cost, fix a target amount and seek options to accumulate it until the time comes. To be more sure, you can also take help of financial planners and draw the right roadmap.
When your family grows, the day-to-day needs also multiply. From buying every day essentials for your child to handling the expenses of education, you will need to squeeze it all into your monthly salary. Thus, you will need to ensure that your savings do not get affected by the increase in the expenses.
Begin by controlling unnecessary expenses and keep track of the money that you spend. People also use credit cards extensively; however, it is advisable that you should limit its use and only buy things when you can promptly pay the money back.