Children’s educational plans are investment tools that are developed for parents to save & invest funds for their children’s future education. These plans offer a dual benefit of savings & protection, with guaranteed returns. This includes book costs, tuition fees, & other educational expenses. In this article, we will explore some of the best ways to save money for a child’s education, thereby alleviating financial constraints for parents.
A Child Plan is designed to fulfil the future financial requirements of a child by providing dual benefits of savings & insurance, hence leading to the creation of wealth. The corpus accumulated can be used for a child’s education, marriage, or any other additional requirements, even in the absence of a parent.
Reasons to Buy a Child Education Plan
Provided are the reasons to buy a child’s education plan:
- It helps in building a committed fund for this purpose only.
- It builds finances for academic & tuition costs, etc.
- It makes sure that the tenure matches the child’s milestones.
- It helps maintain discipline & savings.
- It includes added features such as a loan facility or partial withdrawals.
- Allows tax benefits u/s 80C & 10(10d) of the IT Act, 1961.
- Helps reduce financial burden.
- Ensures there is continuity in the child’s education.
What is a Child Education Planner?
It is an online financial tool that helps parents to lead a convenient educational journey for their child. It provides you with an estimate of the amount of funds required to achieve milestones in your children’s lives for educational purposes. It also takes into consideration the inflation factor, increasing study costs, & other relevant factors to assess as closely as possible to the actual requirements. Hence, to accomplish the life milestones of your child, one needs to assess the total expenses that are required to be incurred. Furthermore, to analyse the reasons why a Child plan calculator should be used, let us go ahead in this article.
How Does a Child Education Planner Work?
It calculates the expenditures associated with the actual financial objectives & hence tracks progress thereof. This calculator uses the concept of future value to ascertain the funds required for a child’s future.
FV = PV (1+R) ^ N
Where,
FV =Future Value
PV = Present Value
R = Rate of return on the investment
N = Duration of the investment.
Let us suppose your child is 3 years old at present & you will require funds when your child is 18 years old, i.e. 15 years from now. Now, let us presume that the present cost of education is INR 8 lakhs & considering the inflation factor to be 6%, the future value will be:
FV = PV (1+R) ^ N
= 800000 (1+ 0.06) ^ 15
= INR 19,17,246.6
This means you will need INR 19,17,246.6 in future to meet the future needs of your child. Now, let us presume there are no savings as of today, & the rate of return is 7% per annum, the amount required per month from today would be:
Using FV = PV (1+R ) ^ N ,
19,17,246.6 = PV (1 + .0.7) ^ 180
PV = INR 6,049
Benefits of a Child Education Planner
Provided are the benefits of a Child Education Planner:
- Personalised Learning Experience:
It allows you to customise the plan according to the child’s needs, interests, strengths, & other factors by identifying the approaches & styles, providing a healthy learning environment.
- Clear Educational Goals
It helps to plan educational objectives & track their progress according to a set framework, ensuring the right path is being followed, which leads to success.
- Comprehensive Educational Preparation:
It ensures that the child receives a well-rounded education, considering their overall development in all areas, including social, physical, academic, & emotional. Incorporating multiple educational opportunities with involvement of the community leads to holistic development amongst kids.
- Smooth Transition Between Educational Phases:
It is difficult to deal with different transitions between the educational phases of a child, which can be made easier with the help of a child’s educational planner. This is because it helps you prepare for everything well in advance, making the journey smooth & uninterrupted.
- Proactive Parental Involvement:
It helps encourage parents’ involvement in the educational journey of a child, along with the mentors, creating a perfect room for collaboration & communication. This helps in creating a bond, support, recognising the child’s needs, addressing their problems, etc.
- Long-Term Vision & Preparation:
It helps generate a long-term vision for children & prepares them for the future, taking into consideration their academic development & aspirations.
Steps to Create a Child Education Planner
Provided are the steps to create a child education planner:
Step 1: Assessing the Child’s Requirements
Assess your child’s aspirations, needs, interests, etc., before starting their educational journey. Assess their strengths, weaknesses, styles, patterns, & favourite subjects to keep a foundation for the educational plan.
Step 2: Choosing the Right School
Visit multiple schools in your vicinity, taking into consideration certain factors, such as teaching methods, curriculum, the school’s reputation, extracurricular activities, etc. Choose the right school that well aligns with your child’s requirements & traits.
Step 3: Select an Appropriate Curriculum
Choose an appropriate curriculum once you have decided on the school, it may be traditional, homeschool, Montessori, etc. All curriculum have their own strengths & objectives.
Step 4: Identifying Extra-Curricular Activities
Assess your child’s interest areas in terms of extracurricular activities they want to get involved in. This can be done by exploring their interest areas, hidden talents, etc. Look for different sports complexes, clubs, artistic programs, or any other activity areas for this purpose.
Step 5: Planning for College or Career Paths
Planning for their future college or desired career path will help in the long run, encouraging your child to pursue their passion.
Conclusion
A child education planner is an efficient online tool that helps parents secure their child’s future by saving today for their secure future. This calculator helps provide an accurate estimate of the funds required to be invested today to achieve your child’s future goals. It offers flexibility by allowing you to customise the available investment options, thus helping to make well-informed decisions.
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