As is the duty of all parents,
making sure that their child's needs are taken care of is essential. It's the
dream of every parent to facilitate the best possible upbringing for their
child/children and assure the best future for them. However, for every dream to
be realized, we must cross the bridge of multiple realities. If you want to
fund your child’s education, you'll need to amass a large amount of money. By
planning ahead, you can provide a much wider array of education options.
Starting early and consistency in
savings are the two key factors in achieving your child's successful future
planning. With careful planning, early savings along with realistic and
practical investment approach, you can successfully give your child the future
they deserve.
The best way to start is with a
mix of savings in government securities (like National Savings Certificate,
NSC, and Public Provident Fund, PPF) and investments in mutual funds and
primary equity markets.
While the former will give you
assured, though low, returns that will multiply every year, the latter will
balance it out with a possibility of high growth. The first strategy will help
you reduce your risks and the second will put you at higher risks with a probability
of higher returns.
Never purchase insurance in the
name of your child. Understand the importance and purpose of child insurance plan. It is
to be purchased to manage the risk prevalent in one’s life – death, health
problems, accidents. If you want your goals to be met comfortably, then proper
insurance planning is inevitable.
Proper estate planning is vital.
You should write a proper and tax-efficient will which helps in proper
distribution of wealth among your children. You can create different tax files
by not allocating the assets directly to the children but to his Hindu
Undivided Family (HUF), grandson/granddaughter. You can also create a Trust
through your Will. This is the most important exercise which you should perform
the moment your child is born.
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