4 Smart Tips to Plan Wisely for Your Child's Future

From 2008 to 2014, the cost of education, right from primary school to the postgraduate level, increased by 175%¹! If you aren't quite sure what this means, let's take a look at an example. Let's assume that your child is currently 2 years old. The cost of an engineering course today in a good college may cost INR 6 lakhs currently. In 16 years, by the time your child is ready to go to college, the cost is likely to go up to INR 15 lakhs. If you're starting to worry about your child's financial future, don't. Here are a few simple tips that you can use to secure their future:

1. Have a Plan in Place for Their Education

Your child's education is possibly the most important expense that you will have to plan for. Every decision that you make during your child's formative years could greatly affect their lives well into adulthood. You may even have to start saving up or investing even before you decide to welcome a child into the world. While saving up money for the future is a good start, keeping inflation in mind, it's a better idea to invest your money in tools that will provide you with high rewards in the future. It's also important to understand that your child may have special needs and require special attention. This could further increase your overall spending on education.

2. Don't Forget to Think About Their Hobbies

While a good education is important, we all remember the popular adage, "All work and no play makes Jack a dull boy." Forcing your child to focus only on their academics isn't always a good thing. You may be killing the hopes of the next Roger Federer or P. V. Sindhu. If your child shows that they're inclined towards a particular sport or even if they're budding artists, you should try to fuel their passions to the best of your ability. Enrolling them in art classes or special coaching could help them better develop their skills. But, coaching also requires significant investment and good financial planning.

3. Consider Inflation and Your Investment Options Wisely

While planning your finances, you may be thinking in terms of how much something costs today. But, as your child grows, costs are likely to grow with them too. Always plan your finances keeping the high rate of inflation in mind. Once you have an idea of how much money you may need for your little one's future, you can create a well-thought-out financial plan. There are a number of investment tools available in the market today, ranging from Unit-Linked Insurance Plans (ULIPs) to Children's Plans that can assist you in planning for a better financial future for your little one.

4. Make Sure You've Planned for Every Eventuality

As you're making all your plans for your baby's future, don't forget to think about life's unpredictability. You never really know when an unfortunate accident may leave you unable to work or take you away from your loved ones. An unfortunate incident may leave your loved ones struggling to keep their finances afloat. This is precisely why it is crucial for you to secure your family's finances with a term insurance plan. HDFC Life Click 2 Protect Life is a term plan that offer life cover, and safeguard against terminal and critical illnesses and disability and will help you maintain your finances through difficult times. Should anything happen to you, the pay out from the plan can help your child continue their education or enable them to continue attending their coaching classes.

Bringing a child into the world is a wonderful and rewarding experience, but it isn't a decision to be taken lightly. You need to be sure that you can do everything in your power to ensure that your child has a happy and successful future, and the only way to do that is by welcoming them with financial stability. Investing in their future and ensuring that their financial future will remain unchanged even if something were to happen to you is of utmost importance. With a few smart investments and carefully-planned life cover, you can grow your family and give your little one the help they need to make all their dreams come true.

Click on HDFC Life Click 2 Protect Life to know more about how we can help make your family secure.

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ARN: ED/11/19/16700

¹https://economictimes.indiatimes.com/tdmc/your-money/how-to-plan-for-child-education-expenses/tomorrowmakersshow/52500991.cms

 

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