Money management tips for investing for child’s higher education.  |  Photo Credit: Representative Image
New Delhi: Saving money for children’s higher education is one of the long-term requirements in the to-do lists of most of the parents. As the expenses incurred on the higher education children has been rising day after day with the incorporation of new curriculums and revamped way of all-round development. Nowadays, many courses demand expensive equipment such as in areas of biotechnology, artificial intelligence and other technology-related courses.
The fund required for a child’s higher education can be met either by taking a home loan at the time of admission or by investing a definitive amount of money before the expected beginning of the course.
3 tips on how to Invest money for children’s higher education
Invest in high returns options
To fulfil a long-term objective, you should invest in options which are likely to fetch higher returns in a long stretch such as equity investment and equity mutual fund SIPs. the prime objective of investing in the equity and other equity-related products is to maximise the gains in the long run as such options have provided better returns as compared to other investment options such as bank deposits, post office term deposits, recurring deposits and insurance schemes.
Don’t invest too much
A person investing a huge amount of money every month towards a sizeable corpus should refrain from over-investing. Over-saving or overinvesting should be strictly avoided as it leads to extra cost-cutting in the present expenses which is also not advisable. How much is too much? To address this situation, a person should calculate the investment amount on the basis of ongoing tuition fees of a particular course factored in with the inflation rate.
For example, if your child is willing to pursue medical sciences after 10 years from now, then you should calculate the total average fees of the medical course at present. Secondly, you should factor in a 10 per cent hike in the tuition fees on a conservative basis.
Starting early can reduce the burden of saving substantially as a person can easily begin with low quantum and there will be ample time to increase the investment amount. A person can start from a child’s birth itself, irrespective of the selected course or without any idea about the area of education in which the child will develop his/her interest. The idea is to have a decent-sized corpus once your child completes the secondary education.