Planning is crucial to achieving a larger-than-life goal, such as obtaining a higher education degree. With the cost of education constantly increasing, even a modest annual increase of 2.5% will result in a fee of approximately Rs. 1 crore for a prestigious management degree from a top-tier college 15 years from now. As such, a child’s education plan is tailored to assist you in achieving this life goal for your child. Here are five compelling reasons why these plans are essential today.
The Rising Cost of Education
The cost of private education of high quality has increased significantly, and a variety of factors, including inflation, contribute to the rising educational expenses. Parents who desire to provide their children with a good education must now pay more than ever before, which can put a significant financial strain on their families. Investing in a child’s education plan early on can prevent such concerns when the child requires funds. Additionally, investing in such a plan guarantees that the child’s aspirations will be realized, even if the parent is absent.
The Burden of Education Loans
Although an education loan can be a lifesaver for many parents, it may not be the best solution. Repaying the education loan can take over five to six years of the child’s initial career and monthly earnings, which may delay the child’s future planning. You can use a child expense calculator to plan your budget. Moreover, education loans often have high-interest rates. Consequently, parents should begin planning for their child’s education early rather than expose them to the stress of an education loan.
Increase In Career Options
Due to the abundance of career opportunities available, children may aspire to pursue various job paths. Nowadays, having multiple employment options is quite common. Apart from popular and lucrative career options like medicine, engineering, management, and chartered accountancy, there are numerous options in healthcare, travel and tourism, media, and other fields. While the candidate’s interest is undoubtedly a crucial factor in their career decision, job prospects in the industry are also essential considerations. Gone are the days when parents primarily considered the fields of engineering and medicine for their children. The best course of action is to begin saving early so your child can explore and learn as much as they desire.
The Boon of Compounding
The underlying concept of early investments is similar to early savings- the more time you have, the more wealth you can accumulate. However, investments offer an additional benefit- compounding. The returns generated in the initial investment phase get added to the principal amount, resulting in a higher overall return. This implies that your money will grow at a faster rate as time progresses. This is also why investments are a more advantageous alternative than saving and why it is imperative to begin investing without delay.
Savings Mentality from a Young Age
Parents can instill the significance of saving in their children from an early age by being role models and setting an example. Children tend to learn more from their parents’ actions than from their words. Therefore, if parents demonstrate a savings mindset, their children are likely to develop one as well. Children will comprehend the importance of money and appreciate that saving is equivalent to earning. This positive mindset can lead to the development of other good habits in children, such as discipline and self-control.
Conclusion
The above discussion shows that early planning and implementation are crucial for achieving your child’s educational goals. Delaying the process can result in significant costs. Thus, it is imperative to begin the journey early and devise an effective strategy for fulfilling your child’s educational aspirations.
Even if you are confident about starting early, several investment plans and solutions are available to help you secure your child’s future education. Use a child expenses calculator to get an approximate idea of the funds you may require. It is advisable to begin saving for your child’s education as soon as possible, even before they start kindergarten, as this can help you avoid the need for substantial debts in the future. Additionally, starting early allows you to benefit from compounded gains over time.