All parents try their hardest to make their children’s wishes a reality. They are the apple of your eye and you want to see them have a safe, secure and stable future. As a parent, you want to be able to do everything in your capacity to make sure that your child’s future is set. Your child may have big dreams and with these big dreams come big expenses as well. The cost of education is high and the fees of professional degrees like an MBA, LLB or MBBS are very high, going into lakhs. Highly specialised quality education form top, leading institutions is expensive to say the least. Wedding ceremonies and functions are also exorbitant. At the same time, the cost of living has also sky rocketed. Trying to meet these demands is not an easy task. Just mere saving money in a bank account unfortunately will not be able to cover these costs. It is important that you plan for your child’s future financially. Thus it is important to consider other options to secure your child’s future.
Majority of parents begin saving for their children when they are born and some even start saving before they are born. However, most of the time parents save or invest in low-yield instruments like a Public Provident Fund and fixed deposits. These may not be the best options and parents may not be able to reach their target goal. In such cases it would be prudent to consider investment options like a mutual fund or a child plan.
Investing in mutual funds allows you to invest in a large range of securities. In this way there is a limited risk of a possible decline in the value of a particular security. A mutual fund is tax efficient and thus is a good long-term investment solution. It is managed by professionals and over time, could yield good returns. Many banks and financial institutions have many plans to secure your child’s future. Child plans are insurance cum investment plans. By investing in a children plan, your child’s future is protected in the case of your death and at the same time, the money invested can be used to finance his or her education and marriage. Apart from these options, parent can also invest in bonds, gold and NSC.
Planning for your child’s future is important and it can never be done too soon. As stated above, there are a host of options which you can consider. However, before you invest in a plan, you must consider the goal, the estimated amount required and the time horizon. You must also examine your finances and then determine which investment option is most suitable to secure your child’s future.