Choosing an investment plan for your child’s future is the first step you can take towards securing their dreams. But, selecting the right policy is a difficult task. Here’s a step-by-step guide to help you figure out how to choose the right plan.
Birth of a child brings immense happiness in the lives of parents. Watching them grow and learn things are moments which have to be cherished forever. And along with the joy, there comes responsibility. Responsibility to provide them with a secured future so that they can follow their dreams. And you do not want them to give up on their dreams due to a shortage of funds.
Also, this does not mean you have to jeopardise your financial stability to provide the funds your child will need in the future. One way to secure your child’s future, without putting yours in danger is by investing in Investment plans for your child. Follow these steps to find and choose the most appropriate investment program.
Starting Early and Gauging the Requirement
Starting early has to be the most crucial step. Starting as soon as your child becomes part of your world will give you a good number of years to save and the amount invested will also be comparatively smaller. This also puts a lesser burden on your current financials.
There are two primary needs for investment- education, and marriage. You have to decide the time and year by when the funds will be required. Also, not just higher education, the plan should be able to fund extra-curricular activities, tuitions, and anything else that your child might need.
Identifying Higher Education Plans
It is impossible to determine what your child might want to do 15 years from now. But, to start investing and understanding what the required amount would be, identify good two to three career options. This could be based on the interests your child has now and your wishes.
Knowing The Target year
If you’re particularly saving for engineering or medical college (graduation), your child will need the money by the age of 18. So if you start investing when he/she is three years old, you have 15 years in hand.
Finding What the Courses Cost Now
The next step involves finding out the costs of those courses which you want your child to pursue. You can decide the courses, the institutes, and place, and check out their fees on the respective websites.
Estimating Future Costs
Inflation affects the costs of education significantly. And, if your child wants to study abroad, the fluctuations in exchange rates have to be considered too. To find out what your preferred courses are going to cost when your child comes off age is by considering inflation rates. A good investment plan should consider the inflation quotient.
Selecting the Right Plan-
Features offered by the plan
Every plan offers different features. Some might offer what you require the most and some might not. Reading the terms and conditions and characteristics will help you understand which plan has to be selected. Some important features to look out for, are-
Choice of Funds
After figuring out all the points mentioned above, it is time to take up a policy and start investing. There are various types of child investment plans available. But the one you choose depends on the kind of features you want, the return on investment, and the time you have in hand.
These tips are to help you understand how to go about selecting the right plan. Start early, choose the right plan, and secure your child’s future, so there is no risk in the future.