5 Easy Steps to make a planning for your Child's Education
One of the main things that parents are worried about is their child’s education. Parents start saving for their little one’s future when their children are tiny tots. The cost of education these days is very high. If you want your children to get the best education then you must have a savings plan for the same.

Here are some tips for child education planning:

1. Decide on a date:

Here you have to keep in mind your child’s education goal. That is after higher secondary what course he or she might opt for. Like if it is a technical course then it will be 4 more years after the higher secondary. Based on this you need to decide on the target date which will depend on what exactly your child might pursue in the future.

2. The amount that needs to be invested:

Next you need to decide the amount that you may have to spend on your child’s education. You need to keep in mind that professional courses like MBA or medicine or engineering is going to cost more. Your child will not take up the professional course tomorrow but it will be after a few years. So you need to keep the inflation rate in mind when you decide on the amount that you might have to invest in the future.

3. Keeping inflation in mind:

As mentioned earlier you need to keep in mind that the cost of education will increase in the future. It is important that you keep this factor in mind and then decide on the amount that you will need few years down the line for your child’s education. Suppose if today a particular course is costing 10lacs then after say about 10 years or so it may cost 15 or even 20 lacs.

4. Returns from the investments will be the key:

So you have decided on the target day and the investment amount that you will need. Now comes the most important point. That is planning how you will get this target amount at the right time. This is where systematic investments will be important.

Now the investments that you make will depend on your knowledge about the market and different types of investment plans and the amount of risk that you are willing to take. If you are not willing to take much risk then you must opt for balanced funds. Here you can expect returns of around 10%. If you have no problem in taking more risk then you must opt for products like Mutual funds, equity etc. The risk involved is higher but the returns that you get will also be higher. You can expect returns of around 14%.

5. Your monthly contribution:

Now next you need to decide how much you are willing to invest every month. Your monthly contribution will help you get closer to your ultimate goal. You can get the amount that you need to invest every month using the following formulae:

C = [FV * r] / [(1+r) * { (1+r) ^ t – 1 }]

FV is Future value that you need

R is the rate of return that you need

T is the tenure.

If you find all this too confusing then here is an easy way out. Just opt for the services of a good financial planner who will give you good guidance. Wealthcare securities pvt.ltd. can provide you all the required guidance for child education planning. They will help you plan out things in such a way that you will be able to support your child’s school fees, you will get maturity benefits for your child’s higher education and facility to avoid capital erosion.