Wednesday, August 18, 2010

Plan early for your children's education

Child’s education is one of the most important topic when it comes to financial planning. It is essential to plan for the future because cost of education is advancing faster than inflation.

Education planning is a long process as it could range from 15 to 20 years. There is a need to start the planning process as soon as you can to reduce the monthly commitment required by taking advantage of power of compounding over time and the ability to ride out the volatility of different market cycles over a longer period.

Endowment insurance plan is one of the most popular choices as it provides both savings and protection. However, parents who are savvier with finances can consider equity market, high dividend stock, mutual funds or unit trust. Early planning brings flexibility and the opportunity to optimize risk return on the strategy chosen.

People who prefer the traditional way of saving can open a bank savings account for the child to provide liquidity and cultivate a good savings habit.

Not every family can afford to set aside a lump sum to finance a child’s education. Thus, it is a good strategy to have the discipline to set aside money on a monthly basis through either a regular savings/investment plan. It is very easy to find excuses to dig into savings if there isn’t a strategy or specific account setup, so stay focus.

There will be sense of comfort and peace of mind if children education fees are secured by starting early to plan with a saving and investment strategy. Discipline will be the key to success of education planning.

1 comment:

  1. Beautiful article shared all the information about child education plan and its benefits, This will help people who are looking to get an insurance plan. For more details. Best life insurance in UAE

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