Having a child is a blessing for any parent. It is truly overwhelming for any parent when a child is born. However, with this happiness, additional responsibilities also set in. One of the major changes that occurs is the financial responsibility which also determines future savings behaviour. Saving for your child’s future is one of the top priority goals and as this goal is time bound, it cannot be postponed. Having said that, as a young parent you will also be in a better position to save for your child’s education, as you have enough time. Thus, it is crucial that you budget education expenses for your child into your monthly cash flow, along with other expenses.
“Planning for child’s education is one of the most important goals for any parent and every parent should plan for it well ahead of the time. It should start as soon as the child is born because investing early gives a good time horizon to spread across different asset classes. When you start early, you can optimize risk much better and take advantage of those aggressive investment options like equity which have the potential to generate best returns. Even if you start small, you can still manage to generate a bigger corpus because of the power of compounding,” said CA Rishabh Parakh, Director at Money Plant Consulting, a Financial Planning firm.
By Mahalakshmi Hariharan
