Investment Planning for Children’s Future

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• Saving For Child

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Investment Planning for Childrens Future
Every child is precious to their parents. Every
parent wishes for their child to get the best
possible education and other amenities. This
can be achieved by planning your investments and
saving for child systematically. There are
various ways in which a parent can secure their
childs future. Its advisable to start saving
and investing at an early age, ideally even
before you have a child. The earlier you start
the more benefits you get, like long term
capital gains, longer term horizon which reduces
the risk and also results in a higher
corpus. Now you would wonder how much to invest,
where to invest and also how much you should save
from your income. To achieve the desired goal for
your child you need to save and invest regularly.
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Here are a few things which one may consider
while planning for a childs future
Savings Savings are crucial when it comes to
financial planning, because without savings you
cannot invest. Also, one needs to have sufficient
funds for emergency purposes this sum is
generally 3 times your monthly salary. This
emergency fund can be in form of cash in a
savings bank account. Savings should start at a
young age and should be imbibed in a person as a
habit. Insurance No one can predict the
future. As the future is uncertain, one should
always hedge the risk by insuring oneself as well
as their child. This is the part where you need
to combine a child plans and a term plan (as a
pure protection plan). A childrens plan is
crucial, because with ever-increasing inflation,
it is necessary to get a child plan which will
help in systematic savings as well as financial
growth. It is also necessary for the parent to
get a term plan which will be helpful to the
family in case either parent dies or is rendered
unable to earn due to some unfortunate event.
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Inflation should always be taken into
consideration while planning for your childs
future. Inflation actually erodes your hard
earned money. Let us take an example an MBA
today from a reputed management school would cost
around Rs.5 lakh. Ten years down the line this
amount could become Rs.10 lakh if we take a 7
hike in the fees every year. We have taken 7 as
an assumption and a replica for inflation,
because over the period of a decade, inflation
tends to average at 7. Investing  While it is
important to save, making your money grow is
equally crucial. One needs to systematically
invest money in various instruments like fixed
deposits, mutual funds, and physical gold. 
Investments should be made only after defining
the risk appetite. A risk-taking investor may
even invest in direct equity while a risk-averse
investor may invest in FDs and RDs or even postal
savings scheme.
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One can either hire a financial planner to make a
proper plan for their childs future or even do
it on their own by consulting bank managers,
insurance agents and mutual fund advisors. To
conclude, preparing for your childrens future is
a simple process reduce your expenses, increase
your savings, invest properly and regularly and
get insured early! Source http//lifeinsurance.
bajajallianz.com/ulipedia/investment-planning-for-
childrens-future/
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