WSL Desk
As mothers and fathers, our biggest desire is to have our children grow up, prosper, and succeed in their endeavours. But the increasing cost of education in India may put these ambitions out of reach if we do not plan. From the cost of preschool to tertiary education overseas, each step involves a financial cost. This is where child plans are useful – providing you with a systematic approach to ensuring your child’s future while relieving your own tension.
The Rising Issue of Education Expenses
Indian education has experienced a constant increase in costs. Industry studies reveal that the cost of higher education increases by as much as 8-10% every year. That which may cost ₹10 lakhs now could easily cross ₹20 lakhs in a decade. Parents, without planning, will find it difficult to provide for this, and they will be forced to take loans or compromise on other goals.
Principal reasons why planning ahead matters:
- Inflation Effect: School and college fees increase at a higher rate than overall inflation.
- Surprise Costs: From extracurriculars to international opportunities, surprise expenses add up.
- Debt-Free Education: Don’t saddle your kid with student loans later on.
Starting early with child plans ensures you’re ready when these costs come knocking.
How Compounding Works in Your Favour
The power of compounding can make small, consistent investments into a huge education corpus. In short, the earlier the investment, the more time your money has to compound.
Example Situation:
- Assuming a 10% return per year, if you invest ₹5,000 every month from the time your child is 1 year old, you might end up with approximately ₹15 lakhs when your child is 18 years old.
- If you wait 5 years, you would have to invest almost ₹9,000 a month to achieve the same thing.
This shows how compounding benefits early investors and how a good child plan can give consistent growth in the long run.
Steps to Build a Secure Future
Here’s a straightforward method for building a solid financial foundation for your child:
- Assess Future Needs: Make a projection for the total education expense of your child, including inflation.
- Start Early: The sooner you start, the less your monthly investment has to be.
- Select the Appropriate Child Plan: Seek plans with assured benefits and liquidity.
- Review Yearly: As your income and your child’s expenses increase, scale up contributions.
- Stay Disciplined: Don’t withdraw in advance to reap long-term success.
Peace of Mind for Parents
A soundly planned financial plan provides you with more than mere savings – it provides peace of mind. You can concentrate on developing your child’s abilities, knowing their future and education are well cared for. And, it eliminates financial stress at pivotal stages such as college admissions or career decisions.
Conclusion
Your child’s prosperous future begins with action today. Increasing education expenses are unavoidable, but with the strength of compounding and the comfort of a guaranteed child plan, you are able to remain prepared. If you start early, you not only make your child’s aspiration possible but also double your own peace of mind.
