FINANCIAL PLAN FOR CHILD’S EDUCATION
In India, several
surveys among parents have shown that securing a child’s future through good
education, and then taking care of the expenses for the child’s marriage are
among their top priorities.
Financial planners, advisors and fund house officials say that just like
every parent is concerned about the health of the child since the time of
his/her birth, they should be as concerned about meeting the costs of the
child’s education. “Like they give the child various vaccines so that the child
remains healthy all his (/her) life, they should also put in place a good
financial plan for the kid, so that he (/she) is protected well,” said a top
fund house official.
Since a child has several years ahead of him/her before he/she needs
large chunks of money (we are assuming large fund requirement for higher
education and then marriage), parents should look at systematic investment plan
(SIP) in equity funds for the same. In the long run, an SIP in a good equity
fund would create a corpus which is much larger than what a recurring deposit,
a fixed deposit or an insurance plan can create.
Putting In Place An SIP
1.
Select one or two equity fund(s) from a good fund house with a track record of several years
2.
Speak to family members to estimate when your child could go for
higher education and when he/she could get
married
3.
Fill up the application
form(s) for the fund(s) you have selected
4.
Fill up the ECS mandate(s) for
automatic transfer of money from your bank account to the fund(s)
5.
Fill up the SIP mandate(s) for the
fund
6.
Be careful not to touch these investments unless under extreme conditions
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