Children are our future and as parents, we aim to provide the best of everything for our children. Higher education is no exception. Saving for your child’s education is an important task in every parent’s life and is often an important factor for their success in adulthood.
However, when it is time for children to pursue higher education and undertake a field of study to support their future career path, many parents may not be fully prepared financially. Rising inflation is affecting all sectors, and with education costs shooting up, it's wise to start financial planning at the earliest.
On top of these considerations, the escalating competition for admission to quality institutions is compelling parents and students to turn to private institutions, which can be quite costly. Increasingly parents are facing the dilemma of whether they will be able to fund their children's aspirations.
READ MORE: 5 factors to consider before investing in your child’s education
Here are four helpful tips to help parents to be financially prepared for their children's education needs:
One of the best and most obvious solutions to the ever-growing concern of not having enough for the future is to start early. Not only can you accumulate a larger sum, but your money will also benefit from the power of compounding. Starting early will help set off other uncertainties such as external economic factors, job changes, etc. The key is to start well in advance and to keep going.
Choose the right option
Just as important as starting early is making the right choice. There are lots of options and the right financial decisions for your circumstances will help you get good returns. Investing in a child’s education plan with guaranteed benefits, flexibility of premium payment term and variable options of receiving pay outs can help maximise savings.
READ MORE: How to calculate the right corpus for your child’s higher education?
Manage expenses or make a budget
As a family grows, day-to-day expenses increase, and the first step towards increasing savings is to control costs. As a parent, you must identify how you are spending your hard-earned money and where you can put it to ensure better returns for different life stage needs. The secret to success here is to save first and then spend, whereas most people do it the other way round.
Review your portfolio
Once you have chosen a plan and put things in place, you need to review it at least once a year and whenever your circumstances change (like if you have another child or purchase a home). You should also check whether the amount required for meeting the goal has changed over the course of time and if so, then how and what you can do to meet those changing needs.
Parenthood can be both wonderfully rewarding as well as challenging. Planning for a child’s higher education is not just dependent on numbers: it is a combination of various factors including your children’s interests. Without exception, every parent wants to ensure that their child has a secure future and education is often seen as a key component of this. So, as you consider the future, aim for a balanced approach that will help you meet your financial goals in a planned and structured manner.
Note: The article should not be considered professional financial investment advice and the readers are advised to read the product brochure or consult their financial advisor before buying any insurance plan or financial instrument.
Sameer Bansal is the Chief Distribution Officer at PNB MetLife