If you have a daughter and are less than 10 years of age, then the government’s Sukanya Samriddhi Yojana is the best and affordable option for investment during this time. You can open an account under Sukanya Samriddhi Yojana for just Rs 250.

All of us have now passed out of a pleasant and comfortable time. In earlier times there were very few options regarding most things and their preparation was very easy. However, in the globalization and internet age, a large number of opportunities exist for all. These include your children too. Their aspirations are now skyrocketing and essential education has become quite expensive now. According to the latest data from the National Sample Survey Office, private spending on general education (primary to post-graduate and above) between 2008 and 2014 registered a huge jump of 175 percent. During the same period, the average annual expenditure on professional and technical education increased by 96 percent.

These expenses included book, transportation, private coaching and other related expenses along with course fees. In such a situation, it can be assumed that since 2014, these expenses have increased more.

According to one estimate, inflation in education in India is on average around 10-12%. Even if we keep the increase in the expenditure on education at 6-8 percent, then it also has a very strong impact on our household budget. For example, if on an average engineering costs in India at Rs 6 lakh and Rs 10 lakh for an MBA, then after 15 years, the expenditure on these will go up to Rs 15 lakh and Rs 30 lakh, respectively.

This is only the situation in India. Studying abroad has become an important goal of life for the new generation (Generation Z and Generation Alpha). A large number of students of this generation are making efforts to study in top universities of other countries to speed up their careers. Now at such a time, you cannot postpone any kind of planning decision regarding the future of children. If you have recently got married or have become parents, then it needs to be looked into immediately.

Try these tips for planning for the future of children

Early start

Keeping in mind the future prospects, planning as soon as possible is very important. It is very possible that the child will have some dreams of his own and as a parent you also assess his ability. In such a case, prepare a blueprint for their possible education expenses. It is also necessary to include inflation in it and start working towards these financial goals.

Many times parents wait for children’s education to begin and many times they impose their dreams on them. I think this is a big mistake. Starting and saving as soon as possible increases the amount of capital you have. This benefits greatly in the long term. Along with this, you also have a chance of correction.

Sukanya Samriddhi Yojana

If you have a daughter and her age is less than 10 years, then the government’s Sukanya Samriddhi Yojana is the best and affordable option for investment during this time. You can open an account under Sukanya Samriddhi Yojana for just Rs 250. You have to invest a minimum of Rs 250 every year to keep this account active. The best reason for investing in this scheme is that it remains locked until your child is 18 years old. The duration of this scheme is 21 years but after the child is 18 years, partial withdrawal can be done for education related expenses. At the same time, in case of any kind of medical emergency, you will be able to withdraw only after five years. This helps when the money is urgently needed.

The scheme generally gets more interest than PPF and is tax free.

Insure yourself

Not having a parent is the most dangerous for children’s dreams. Children are financially dependent on you. The untimely death or disability of the parent leads to the breakdown of children’s future dreams. In such a situation, it is very important to buy term and health insurance for yourself. In fact, as your income increases and add family members to your insurance plan. It is necessary to review your security requirements.

Make plans related to your education aspirations

The desire to study abroad is continuously increasing among the younger generation. To achieve this goal, any parent should start financial planning for at least 10-15 years in advance. For this, firstly you should estimate the future cost in education abroad. We understand this thing that if 20 lakh rupees are being spent in studying abroad, then after 15 years, keeping in mind the inflation of six percent, this cost will be Rs 50 lakh after 15 years.

You can achieve this by planning very thoughtfully in harmony with Riski and Safe Instruments. Nifty 50 index funds or guaranteed insurance plans help you progressively increase your money in the long run. With this, your future goals are also fulfilled and you will not have to take a loan in future.

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Instill good money habits in children

It is very important to instill good habits related to money and money in your children. After this, your children will be able to manage their money by themselves after a certain age. At a very young age, it is important for you to prepare your budget, put the important things related to taxation and money in their minds. With this, they will be able to manage their money from themselves if they are away from the family.

The conclusion

It is very important to lay the foundation for the future planning of children at very early times. This increases your earned money significantly in the long term.

(The author is the Chief Retail Officer of Edelweiss Tokio Life Insurance. The views published are personal to the author.)

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