Here are some tips for planning your child’s future expenses.
With the continuous increase in the cost of schools, the cost of studies has become very high. Parents are also ready to compromise for their expenses like EMI so that they can get their child enrolled in a big school. There is a trend of around 10 percent inflation on the current education of the child. Therefore, there needs to be a plan in advance for spending, demand and competition.
School expenses: Given the inflation of 10 per cent, there are only some options for school fees or admissions such as bank fixed deposits or recurring deposits or debt funds. This is because two-three years is a very short period to invest for average returns in the market. So invest more for these annual expenses.
Planning for future education: Now when you have to plan for the future expenses of the child, there should be a right plan for that. If you start early, you can also take advantage of the power of compounding. This directly means that the sooner you invest, the more money you will be able to earn because compounding interest is deposited on the entire fund. Also keep in mind the future value of money and inflation.
Here are some tips for planning your child’s future expenses:
This is necessary to get the maximum benefits. As the investment period increases, the returns will also increase. Power of compounding will help in achieving the goals easily.
Often we do not analyze needs properly and set goals. This is a very important step because planning has to be done according to your needs.
Make the right plan
Most people take loans for the future of the child or spend it wrong because they would not have planned in advance. If the cash flow is analyzed properly in the beginning, then there will be no difficulty in implementing it.
Follow the plan strictly
If the planning has been done correctly, then you should also follow it strictly and do not remove it except being absolutely mandatory. After assessing the need, preparing the plan and following it strictly, there will be no problem.
Keep in mind that you are making the right financial plan for your child’s future expenses. The review is also important because needs, goals, dreams etc. change with time, lifestyle etc.
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