How to Plan For the Savings of Your Child’s Education
Every parent wants to give their children a secure, risk-free future. All of them try their best to create an umbrella for their kids so that they can dream for a skyrocketing career. But ,most parents get a knee jolt when they meet the reality of surging educational expenses.
While in some advanced countries education is free for up to 18 years, and parents have to confront the higher educational expenses, in other developing countries like India, things are completely different; many parents sacrifice their happiness and cut down their major expenses to fulfill their child’s education.
Some sacrifice their luxury, and a few sacrifices their basic needs also.
But one can avoid such conundrums if they can save money in a systematic and planned manner.
So, how to save for your child’s education?
1.Start early: Investment is a tricky game; if you can able to step in early, you can able to understand and save more for your future. So, start diverting some part of your money that you can afford. It will help your money to grow.
2.Budgeting: Every household has different financial goals. It differs from their financial obligation, income, expense, and aspirations. So, please find out your financial status on this ground and do not compare it with others. Do your budgeting part efficiently and strategically by analyzing your current financial stand on a budget.
3.Different income sources: Don’t just stick to one income; try to create different funnels of income sources in a world where everything is selling from water to soil. You can find something that you are an expert at to get a different source of income.
4.Invest in SIP: systematic investment plans always help your fund to amplify even when you are sleeping. This helps in saving small amounts at fixed intervals.
5.Invest in tax-favored plans: Save for baby’s college. Always try to save on tax-free plans like Education Savings Account (ESA). This fund permits up to $2,000 per year. This amount must be invested after taxes are taken out, but it swells tax-free. Even if you invest $1000 per year at an average interest of 12% from the day your baby is born till 18years, you will grow around $62,000.
6.Automate your savings account: Plan never works if you never execute. Most of the time, we keep on planning for saving, but hardly save. When you reprogram this option, it will deduct the particular amount from your account, and you do not have to do much exercise on this, and your purpose is served.
7.While making a plan, don’t forget to save some money for your children’s extracurricular activities. As every child is special and different, they have different hobbies and interests. We must encourage these skills and try to strengthen them, but again, we need money. Most of the parents save for their education, forgetting about these extracurricular activities.
Children’s future is highly essential, but what I feel is, sacrificing your entire life to construct their life is not a wise decision rather, try to build a financial cushion so that you can survive an accident.