5 Best Ways to Fund Your Child’s College Education: Tips for Parents
In today’s world, college fees have soared to astronomical heights. It is tough for parents to fund their children’s education. Unlike foreign countries, where students work besides going to college to pay for their college tuition, Indian parents believe to fund their child’s higher education. Parents’ role in children’s life is extremely important and makes a huge impact on their success. Parents start to gather funds as soon as they are blessed with a baby and start investing in best mutual fund schemes available. It is an inherited practice which parents perform to secure the future of their children.
Financing Your Child’s College Education
Financing your child’s college education has been one of the major concerns of parents of all generations. Parents consider it a duty to fund their child’s tuition. We have come up with certain financial tips for parents which will definitely help you find a way out and ease the burden on your shoulders.
Be an Early Bird
As the idiom goes, “The early bird catches the worm”, parents get to have a great amount of benefit if they act as early birds regarding their investments for funding your children’s higher education. It has been estimated that the tuition for most of the professional courses across the country would become at least 3 times of what it is now in the next 10 years. It is wise to start investing early and plan your kid’s future when he or she is young.
Short Term Safe Play
When it is college education vs money, college educations always wins and when the timeline is slim, your investments are always at risk. The liquidity which a college education demands is relatively higher during this term. So it is advisable to parents to rely on the fixed income sources and invest them in safer options unlike PPF which doesn’t ensure timely payback. Investment risks must be minimized in this phase which would eventually become one of the best ways to fund your child’s college education in this scenario.
Build Your Child’s Investment Portfolio
Once the portfolio is in place, you must review it every year in order to check on estimates that you might have assumed the previous year. This is one of the best strategies as it comes handy while determining the major factors of your investment release. The tuition and cost of living will become the 2 major concerns. So it is inevitable for you to keep a check on the growing inflation. Salary increments must link to proportionately higher cut in the investment you plan for your kid.
Take Wise Financial Decisions
A financial guide must be available at your disposal to help you consider your investment options at any given time. He/she can guide you on how to save and invest for your kid’s education. When parents consider traditional options like life insurance policies, they are surprised to know that the return is hardly 5-6%. Whereas if they invest in Equity mutual funds, the interest rates soars at 15-16% percent per annum which is definitely subject to market risk but thrice as good as the conventional options.
The Final Goal
Once you have invested a good amount and are around 4-5 years away from your goal, you must shift your focus from equities to the safety of debt. There should be a systematic fund transfer from equity fund to a short-term debt fund. This will decrease the amount of risk and help you tip your investment with the final finishing touch it needs. This is also one of the best tips to save money for children’s college education.