Children Education is basically planning for the future cost of education a child may go through. It is one of the biggest goals of parents these days because of the tough environment and high expenses involved.Most of the parents start saving for Child Education right from the birth of Child, which is a great.
So how much you should invest in your child education has 2 aspect to it. First of all, you should decide where you want your child to take education, Own country or In Foreign. Now you need to decide for which stage you are accumulating money, whether it is graduation level or master's level. Once you have decided all of these then it becomes crystal clear as to how much money you will need at each level.
Let us take an Example -
So you can now clearly see that education in foreign country is high as compared to own country. So you need to start accumulating money as per what you have decided.
Here are the list of few mistakes parents make while investing for their child's education -
a) Buying Child Policies -
These child plans comes with high costs, rigid structure and very less control over it. Traditional Children plans (which are endowment or money back type) mainly do not deliver of returns front and ULIP children plans come with high cost .
b) Having a Casual Attitude towards accumulating funds towards Child's Education -
Yes, you heard it right, when it comes to child education parents always think that it is for graduation or mater's level so it is a very distant dream as of now. If we wait and start investment after few years then it will not matter much. This is where parents go wrong because they forget that invested money grows well in compounding. To get the best compounding result one needs to invest for long years say 10 yrs, 15 yrs etc..
c) Not Continuing with the Investment -
To remain invested for the desired goal to be fulfilled requires a lot of discipline. And when it comes to child education many investors think that as it is a distant goal they can withdraw the invested money and utilize it to fulfill other goals. This is a very wrong approach towards making any investment. So investor should continue investing for their child education if they have started.