Best tips to secure your child’s future with proper financial planning

Best tips to secure your child’s future with proper financial planning  28th September 2022

The foremost priority for any parent is to make their children financially secure by the time they turn eighteen and are ready to take on the world. In the growing years, your children may even decide to start up some business of their own for which they will require funds too. Also, you must consider the high living costs if your child decides to study or work in big cities like the metros. It is crucial to allocate funds to aid your child's education at foreign universities, considering the boost in international education opportunities.

Efficient financial planning is the key to being future-ready and meeting all expenditures to secure your child's future. We have designed our guide to help you plan your finances in the most appropriate way to ensure your child's bright future.

1. Start early and set your goals:
The first tip is to start as early as possible and set realistic and achievable goals. You should decide how much funds you will require to satisfy your child's aspirations. It need not be an exact amount; a close estimate will do. Calculate how much money you can save and put aside every month for your child from your current income.

2. Investing:
Investing your savings will make them grow; hence, you must decide where to invest this money. Ideally, your investment should be more in equity and less in safe-haven assets such as debt funds, fixed deposits, and gold, considering your long-term goals. Equity has the power to give you compounding returns over the years and grow your money exponentially. However, it is associated with risk.
Fixed deposits and debt funds will give you relatively lower returns, but they will be steady and safe. You must make smart decisions while investing your capital into these investment instruments.

3. Choosing the best schemes:
You will need some money for your child in the short term to meet her schooling and living expenses and more money in the long term for meeting her higher education expenditure. Allocate your investment between different asset classes accordingly and choose the best possible schemes available for the same. Invest in avenues that allow withdrawals without a long lock-in period to meet your short-term needs.
You can take the mutual funds route to invest in equity if you are not comfortable with investing in the stock market directly. Equity comes with many options, such as investing in different economic sectors, market capitalisation per your time horizon, etc. You can also buy government bonds and gold directly from outside sources.

4. Appropriate insurance coverage:
Insurance keeps your family secure in case you or your member meets with an accident. Hence, invest in a good insurance policy as per your individual need. What will happen to your child's future if something happens to you? Take a general insurance cover so that your children get fruitful benefits. Similarly, go for a mediclaim or comprehensive health insurance policy from the best health insurance company in India with a full family cover so that you are under no financial stress if anyone from your family meets with an emergency and requires hospitalisation.

5. Nominee appointment:
Never miss out on filling in the name of a nominee while investing anywhere. Fill in your spouse's name or a reliable third person, but do not leave the field blank. Only the nominee will have legal access to your investments in case of your sudden demise.

6. Regular review:
Review your investments regularly. If your investment is not performing as expected, change it to other investment options with higher returns. Similarly, keep checking your mutual funds' scheme performance and change it if it underperforms for a long time.

Proper financial planning will help you to secure your child's future. The above tips will keep you stress-free, and you will have a sufficient corpus ready by the time your child goes for her higher studies or is ready to start a venture. Reliable insurance coverage from the best health insurance company in India and good investments will be the perfect formula to turn your child's dreams into reality while being in their best state of health and well-being.

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Disclaimer: The information provided above is for illustrative purposes only. To get more details, please refer to policy wordings and prospectus before purchasing a policy.