Five mistakes in child education planning

One of the biggest changes in education in the last two decades is that parents have started thinking of education expenses as an investment. The words long-term and investment look like synonyms; hence you must start investing in child education planning from today to ensure that you can plan a better future for your child’s graduation. At the same time, education expenses are sky-high, which makes it an important discussion.

Although the child investment plan is not at its peak, it is rapidly growing as many parents are taking an interest in the benefits of the plan. So, here are the five mistakes which you should avoid while planning your child’s education.

1. Underestimating the future cost of education:

As mentioned above, educations costs have touched the sky. A four-year engineering program can cost around 10 Lakhs, and to be honest, MBA’s are equally expensive. If you are looking for a superior standard of education in India, you must be ready to spend around 50–75 lakhs which is not a small amount.

Moreover, the amount mentioned above is for domestic education, and you might have to spend 4–5 times the amount if you are planning abroad education for your child.

2. Delaying the child education plan:

If you are planning to invest in a child education plan, you must not delay. Even if you start small, it is essential to start early. For example, if your child is three years old and you would need 60 lakhs for their higher studies, you must start saving 12000 INR a month to achieve the target.

3. Not going with SIP or Systematic Investment Planning:

If you are waiting to gather and invest a lump sum amount, you are wrong. You must go with systematic investment planning as it helps you start early and use the power of compounding. When you start with smaller amounts, you don’t have to take the financial stress as you have to only invest a small portion of your monthly income.

4. Don’t put your money in bonds and liquids:

Equity funds are perfect for the short term, but it is best not to play it safe when you plan for long-term growth, like fifteen years or more. According to financial experts, equity funds don’t perform well over 12–15 years. So, if you invest too much in debts, you are risking or reducing your returns.

5. Forgetting to attach child insurance with the child education plan:

One of the most common mistakes most parents make is they don’t combine the child’s insurance plan with the child’s education plan. One of the best advantages of having a child insurance plan is your child’s education will not be affected even if you are not there to cherish it. The child insurance plan is one of the most important parts of your child’s future.

All in all, investing in a child’s education in the future is a great idea if you know how to find the right plan based on your income.