An "Education Insight" survey done by Aviva Life Insurance with IMRB recently revealed that 72% of the parents prefer saving for child over protection and retirement and education ranks as the foremost concern for 81 percent of parents' savings for child's future. The survey also pointed out that around 47 percent parents remain concerned about the cost of higher education which is slated to grow at a far higher rate owing to rise in inflation, and feel that it requires planning at their end.
As the survey highlights, securing the child future is one of the primary goal for all parents. Getting the desired education from school system, protecting child from all kinds of threats, and how to provide for education for the child are common concern which takes the center stage once the child is born. However, most parents are unaware on the exact cost of the child education arising in future and end up under saving for the child. Sometimes it leads to wrong investment decisions jeopardizing the family finances.
Hence, it's very important that planning for the child starts early in life to ensure the funds required at various stages gets accumulated without hurting other life goals.
Here are few points which should be considered while planning for the child future:
1. Identify the Requirement: The first step should be to identify the needs of your child. There is more cost associated with child education then only the school fee. Extra classes, Transportation, Extra Curricular activities etc. are cost which parents have to incur for upbringing their child. When these associated costs rises, the cost of the child education takes more than 60% of the housing budget. Moreover, the rise in the cost of education with a rate more than inflation, along with resulting decrease in value of money make planning more difficult. Identifying the exact requirement will help in knowing the savings required for reaching the desired goal.
2. Have Adequate Protection: The