Financial planning for your child's future is not different than financial planning for your retirement.
Below are the few major expenses that will occur for your child's better future.
First of all calculate and decide that how much you will need for each and every expense? You have to pre-plan for your child’s higher education. You cannot build enough wealth for your child’s education in just 1-2 years.
The best time to start financial planning for your child is the day when he/she is born. If you have not started yet start it now.
As far as possible try to avoid education loan for your children as eventually you or your children have to repay it along with interests. It will be bad for your children to repay the loans in initial phase of their career because initial phase of career is ment for saving and not for spending.
Like retirement planning, here also you will have to consider inflation. Today in 2011 if MBA degree cost 5-10 lakhs in 2031 it will cost around 20-30 lakhs.
You may ask now where do I invest for my child's future? I have seen many ads in television about children's plan do i invest in that? One of the ad i saw where a mother ask dad for Rs.10 lakh for bunty's college fees. And the punch line is "Taki baccho ke collge fees aap ko zhatka na de". Beware of such attractive ads. Child future plans and other insurance cum investment products offered by insurance companies are worst.
You may require almost a decade to build wealth for your child’s future. So pre-plan it. Equity mutual funds are the best financial products to build wealth for your child's future.
Below are the few major expenses that will occur for your child's better future.
- Higher Education
- Abroad Education
- Marriage
- Start-up Business Expenses
- Second Home
- etc.
First of all calculate and decide that how much you will need for each and every expense? You have to pre-plan for your child’s higher education. You cannot build enough wealth for your child’s education in just 1-2 years.
The best time to start financial planning for your child is the day when he/she is born. If you have not started yet start it now.
As far as possible try to avoid education loan for your children as eventually you or your children have to repay it along with interests. It will be bad for your children to repay the loans in initial phase of their career because initial phase of career is ment for saving and not for spending.
Like retirement planning, here also you will have to consider inflation. Today in 2011 if MBA degree cost 5-10 lakhs in 2031 it will cost around 20-30 lakhs.
You may require almost a decade to build wealth for your child’s future. So pre-plan it. Equity mutual funds are the best financial products to build wealth for your child's future.
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