Children's Day: Children's Day is being celebrated across the country today. Everyone is worried about their children. Every parent wants their children to have a strong financial future and never have to face financial crunch. If you work on the financial future of your children right from the time they are born, you can easily create a big fund. Let us know what you have to do.
find the goal
In the first step, identify your goals.. Higher education, recurring education, school trip, bike, marriage, property etc. can be included in this. The second step is to prioritize your goals according to time and importance, so that the person can go after the right goal at the right time. After this, in the third step you have to estimate future expenses according to the current cost and inflation.
Know your future expenses
For example, your goal is to send your son to a top business school after he graduates from college in 2030, and you want to be financially prepared for this. Now the current fee for the two-year MBA program in IIM is around Rs 23 lakh. Now this fee has increased at the rate of about 12 percent annually in the last two decades. Now after calculating we will find that this fee will be Rs 64 lakh in the year 2030. Similarly, we have to calculate the future expenses for each goal according to the current cost. From this we will know how much money we will need for future expenses.
There are 2 types of goals
If you have some immediate goals, then you can make some investments in savings account, FD, liquid and short term debt funds. For long term goals, one can use a combination of equity mutual funds, gold and fixed income instruments like Sukanya Samriddhi.
keep inflation in mind
This strategy is very fun
A trend quite common in America. There parents, grandparents, uncles, aunts.. all contribute some amount towards education fund every month for all the children in there families. Each person can contribute a different amount. A lot of contribution comes from this. This little money adds up to a huge fund.
Image Credit: India-Tv.