What is a Childhood Education Planning Calculator?
Childhood Education Planning Calculator is an important tool that allows you to plan your investments in order to meet the education needs of your children in the future. Getting the right education for children is imperative and the stakes are high when the expenses involved with education are only getting costlier. With an Education Planning Calculator, you will be able to figure out exactly how much money you will need for your child’s education and exactly how much you should save and invest on a regular basis
How does the Calculator Work?
The working of the calculator is very simple. All you have to do is enter the relevant details against the fields and get an estimate on the future cost of the education as well how much monthly savings you should do to reach your goal. Simple details like the investment amount, the age of your child, your age, and annual income can help you determine how much you can save up if you start investing today.
Note/ Disclaimer:The calculations are generated assuming an inflation rate of 6% and the values are illustrative. The actual cost incurred would depend on the future performance of your investment and is subject to market conditions.
Benefits of Child Education Calculator
Education planning is a long term project and can be a difficult one. There could be unforeseen circumstances that can throw you off your financial goals. The child education calculator comes in handy and generates the estimated education costs for a set number of years keeping in mind the rate of inflation. Not only can this help you get a fair estimate but also help you plan your finances better.
Why Should you Plan your child’s higher education?
With the rising rate of inflation and it can never be too early for you to be planning your child’s education expenses. It is important to have a plan in place keeping in mind as any delay in the formulation of the right investment strategy could prove detrimental to your child’s future. While economic fluctuations are unpredictable, planning early can give a certain amount of immunity against it. Planning becomes all the more important if you plan to send your child for post graduate studies, as it will serve as a financial cushion at such crucial times. Since this a very long term plan, a wise strategy would be to start putting aside small sums of money today, rather than allowing yourself to get overwhelmed by large payments and lack of savings later.
Other Long term Investments you should do to help your child’s future education
Equity funds can be a good option for investments for you if you have a small child who still has 15-18 years until undergraduate studies. This is recommended since over such a long period of time the volatility in returns tend to balance out. A high level of equity can also help counter the inflation rate. You can invest in a systematic investment plan that would help you build a corpus steadily, or even opt for a lump sum deposit in case you have a substantial amount to invest . The remaining 30-35% of the portfolio can be diverted to safer options like PPF, Tax saving fixed deposits and tax free bonds. For a short term focus of about 5 years, investing in fixed income options like fixed deposits and PPF would be a wise choice. Even though the returns are lower, they are guaranteed and the risk involved is less as well.