What is a Childhood Education Planning Calculator?
The gift of education is the most precious one you can give your child to propel him towards his dreams. Keeping this in mind, our expert team has designed the” Childhood Education planning calculator”, an interactive tool which would help you estimate the cost you would incur and the savings you must have to meet your child’s future educational needs against the inflation rate.
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
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?
It’s never too early to plan your child’s education but we would suggest you don’t wait for long. It is important to have a plan in place keeping in mind the rising rate of inflation , and delay in formulating the right investment strategy could prove detrimental to your child’s future. While economic fluctuations are always going to be there, planning early can give a certain amount of immunity against it. Incase you want to plan for post graduate studies of your child as well, having a financial cushion becomes crucial. Since this a very long term plan , a wise strategy would be to start putting aside small sums of money today , rather than get overwhelmed by large payments and lack of savings later.
Other Long term Investments you should do to help your child’s education in future
If your child is very young and you have 15-18 years left till your child starts undergraduate studies equity fund can be a preferred investment since over a long period of time the volatility in returns balances 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 do 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.