Financially Plan & Make A Difference To Your Childs Future
But there was a difference. One of the mens kid has completed M.S from a reputed university in USA and the other kid has completed a graduation from a local university. What made the difference?
Have you ever wondered, as I have, what makes this kind of difference in our kids career? It is a carefully thought out long-term planning for kids future.
As a responsible parent, you would not like to compromise on your childs career, regardless of rising cost of education. You need a well developed investment plan that will allow you to meet all expenses for your childs future.
Provision of Medical Expenses
Health care for mother and child will be a potentially handsome expense for new parents. New babies require regular checkups and immunizations even though if your child is in good health. So you need to make provision for these expenses well in advance even before the arrival of the baby.
Adding the newborn to your Mediclaim Policy
If you have an individual mediclaim policy, add the newborn as a member in that policy and get coverage. Do you have an employer provided mediclaim policy? Then, check if the terms and conditions allow you to add the newborn for coverage. If it allows, then add the newborn to that policy. If it doesnt allow then take an individual mediclaim policy for your kid.
Increasing your Term insurance coverage
You need to check whether the existing insurance coverage is sufficient to support your childs future or not in case of any mishappening to you. If it is not sufficient then take term insurance policy for the gap.
Ongoing educational expenses
The educational expenses are skyrocketing year on year. What your father has spent for your college education, is now you need to spend for your kids primary school education. So adequate provision in your monthly budget and a projection for cash flow with reference to school education expenses will be an important exercise for you
Financial Planning for Higher Education
It is going to be a biggest financial shock for you, if you have not properly planned for your kids higher education. Dont delay this plan, start this plan as soon as the arrival of the newborn. Then you will have time on your side.
Assume your kid has completed today his/her schooling. Imagine how much you may need to spend for higher education at todays costs. This cost is going to go up year on year because of inflation. So project this cost with inflation rate for the future. Now you will know how much exactly you may need for higher education in future when you kid is actually completed its schooling.
Other dreams for your child
Apart from the higher education, you may have some other dreams like buying a home for your kid, corpus setup for your kids future profession or business or corpus creation for wedding expenses. You need to follow the similar steps as mentioned in Financial Planning for Higher education for these dreams also.
In case you dont have time or knowledge to do this financial planning you can seek assistance from professional financial planners. They will save your time and make sure that you are achieving these financial goals for your kid.
Savings account for your child
You can open a savings account in the name of the minor. Whatever gifts, the kid receives by way of cheque or cash on the occasions like birthday can be saved there. Also this account can be used to motivate the kid to save from its pocket money.
The other investments which you make for your childrens future like mutual funds or shares need not be invested in the kids name. Banks, generally, will not give loans against shares or mutual funds held in the name of a minor. So, it can be invested in your name. As and when required it can be encashed to meet the necessary expenses for the kid. Banks, generally, will not give loans against shares or mutual funds held in the name of a minor.
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