The financial planning for the higher education of your children should be done in accordance with the respective requirements, upcoming educational avenues, areas of interest of the child.
New Delhi: The financial planning for the higher education of your children should be done in accordance with the respective requirements, upcoming educational avenues, areas of interest of the child. Parents or the guardians planning to save for their child’s higher education should not follow a dynamic plan as advised by many experts, rather they should factor in the aforementioned elements as well before setting up a goal. Here are some mistakes that parents planning for child’s higher education should avoid doing.
Don’t think short-term
Financial planning with regard to the higher education of your children is not a 2-3 years thing. The financial plan or the saving option should not be decided or started on completion of the school education, it should be well in place from the early stages of preliminary education. If parents can make it early then they will be on a much stronger side because, in beginning stages, you would be able to save more.
Don’t be too conservative
Being too conservative on choosing the asset classes and reluctant on taking a few calculated risk may lead to declined savings. The asset class should be definitely chosen on the basis your risk-taking capacity but it is advisable a parent or individual guardian can select multiple assets and can create a healthy basket of risk-free assets and moderately risky investment options to maximise the gains as financial planning for higher education of child is one of the long-term objectives which have to be met in 10-15 years.
Don’t take independent decisions
This one should be the prime objectives of any parent or guardian before they start saving and investing for the child’s higher education. Parents shouldn’t take independent decisions. For instance, if parents assume that they wanted to see their respective kid as a doctor and without taking the child’s consent or listening to his/her desires, they (parents) start investing heavily to create a corpus for higher medical education of the child. Such practices are entirely wrong.
Further, this will create an unnecessary burden if your child wants to pursue a career in an altogether different field. Parents should sit with their children, discuss the possible career options as much as they can and encourage them to introspect themselves.