Looking to secure your child’s future? Understand how investing in mutual funds can help safeguard their dreams.
A few years ago, the leading industry body Associated Chambers of Commerce of India (Assocham) had carried a survey of parents that showed that almost 65% of them spend more than half their take-home pay on their children's education, extra co-curricular activities placing a significant burden on their family budget. According to the survey, parents spending on a single child's education has gone up from Rs 35,000 in 2005 to over Rs 94,000 in 2011 on such items and activities as integral to the school curriculum like fees, transport, books, uniform, stationery, building fund, educational trips, extra tuitions and extra-curricular activities.
Not surprisingly, the rising cost of education in India has become a major worry for parents. According to a study, an average parent spends no less than Rs 20 lakh on academic expenses till just high school only. Now, if we are to add the expenses of college education and professional degree, the grand total would easily touch Rs 1 crore. Now, the critical question to ask is whether you have accounted for such an expense in the days to come?
If the answer is yes, well then congratulations, you are doing well. In case, it is a no, fret not, because it is never too late to start.
The best way to build a corpus for children's future would be to devise an investment strategy. Based on the age of the kid and the supposed requirement in the future, be it a degree from a foreign university or marriage, a fixed sum need to be set aside on a monthly basis. Additionally, there are child investment plans that many parents invest in. Mutual funds with its various options like equity funds, debt funds and income funds can help parents create a tailored approach to investing. And considering the long gestation period of investing in your children's future, a Systematic Investment Plan (SIP) can be a good option.
Given the manner in which competition is on the rise in India and abroad, a high-quality education will be a most basic requirement in the days to come. This is the reason why parents need to start planning for the future and start investing now. In the manner in which inflation has been on the rise, one needs a good investment to be able to beat the rising costs and create a corpus. This is a reason, why mutual funds are one of the investment options for securing the future of your children. Consider investing now.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.