The responsibilities that parents have for their children are endless. You start worrying about his/her well-being right from the time of conception. The primary concern is always the health of the child. Then comes the schooling, college and higher education. Therefore, it makes sense to have a substantial fund available to guarantee access to quality education and improved prospects. A good education from a reputable institution is absolutely necessary in today’s highly competitive job market to give your child’s career the boost it needs.
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Problems Faced By Middle Class Families Related to Education of Child
Funding your child’s education is a hot topic right now given the skyrocketing costs of education. Several parents find it hard enough to pay their mortgage, bills, and living expenses without having to find thousands more for education costs.
The cost of education has caught up with everything else in today’s world. Every parent considers the possibility of their children receiving a quality education. However, it’s possible that the middle-class man cannot even afford to consider it. The majority of students at prestigious colleges and universities believe that prestigious private schools, tuition, coaching classes, and other options are essential. Also, there are additional expenses in terms of mandatory picnics, Industrial Visits, fees for other annual programs etc. But most middle-class children have to do with Government schools and maybe no tuition unless it’s very cheap. Sometimes even with an excellent academic record, the best colleges are out of reach without a scholarship due to financial constraints. In severe situations, parents even have to sell off their assets such as jewellery for their children’s education.
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How To Fund Your Child’s Education Costs?
Everything begins with preparation and savings. Only if you save today, can you invest in a better future for your child. You can ensure that you have sufficient savings for yourself and that you can provide your child with a wide range of educational options by carefully planning ahead. If you invest appropriately, consistently, and in the appropriate instrument, you can save for your child’s education.
Nowadays, higher education is quite expensive costing anywhere between 20-25 lakhs in India and even more in abroad. The expenses also include the course fees, transportation, stationery, books, and coaching. Therefore, it is essential to begin investing as soon as possible to ensure your child’s smooth future. In addition, if you begin saving early for your child’s future, you will experience less financial stress in the end. Therefore, it is preferable to plan the child’s educational needs rather than making investments in the event of an emergency.
Best Way to Save Money for your Child’s Education.
Factors To Keep In Mind To Decide How Much Money Is Needed For Child's Education
Determine the required amount of time: Time is one of the most crucial aspects to take into account when making an investment. Evaluate the time horizon that tells you how much time you have to save from now based on your child’s current age and the age at which he or she will pursue higher education.
Determine the impact of inflation: Compared to other services, education costs are rising at a much faster rate.
Rate of Return: When investing, always go with a rate of return that is within your budget. Always choose a rate that is higher than the rate of inflation.
Being a parent is challenging, because they manage multiple tasks simultaneously. Half of the time, parents worry about their child’s future and whether or not they will have enough money to fulfill their child’s ambitions. It is always good to start saving for your child’s higher education. This requires planning and a reasonable estimate of education costs.
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Best place to Invest for your Child’s Education
Instead of just putting money in traditional fixed deposits and savings accounts, help it grow by making smart investments.
Chit Fund is the best place where you can put your money in order to save for your child’s education. The Chit Fund is a rotary savings plan where you can save, invest, or borrow money as needed. The best part is that they do not fluctuate with the market and are completely stable. In point of fact, there are advantages to investing or funding from a 100% digital, legal, registered, and regulated Chit fund like The Money Club. The Money Club can assist you in setting up a fund for your child’s education. Money club is an online chit fund platform which has created the first ever social network of money. It helps you save money with the help of verified peers.
Money Club provides you a group of verified members with whom you can pool up money. A chit fund is a type of investment in which members agree to come together and deposit a pre-determined amount of money in a pot. The Money Club uses high-end technology to be able to bring basic financial services (saving, borrowing and investing) to a segment of the Bharat that has not yet had access to a bank. For millions of customers, we provide a safety net in times of crisis.
You can expect a higher return of 10% to 15% per year on your investment in chits versus other financial intermediaries. The advantage of saving with a chit fund is that you can save as much as you can each month.
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Benefits of chit funds
Chit funds offer the advantage of being both a saving and an investing vehicle. Let us look at the benefits of investing in chit funds:
- In an emergency, you can easily borrow the money, or you can keep using it as an investment.
- You get a community of verified friends with whom you pool money and who help you in crisis.
- You can borrow money that is several times as much as what you have invested when you need it.
- You receive the funds 6 to 8 hours after placing the bid.
- Safe and transparent transactions as money do not lie with the organizer. Payments are made directly bank to bank account of members.
- The loan is against your own potential future contributions.
- The rate of interest is considerably less than what banks offer.
- Paperwork is not a hassle.
- There is no demand for a high credit score.
- Better returns when compared to fixed or recurring deposits.
Conclusion
With these ideas in place, the process of creating a fund for your child’s education should not be a daunting task. Tiny steps towards long-term financial planning can certainly help create the corpus that is needed.
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