What factors must you consider before investing money in your child’s education?

New Delhi: Parenthood is a wonderful adventure filled with all of life's many delights. One of the most fulfilling sensations is watching your child develop into a lovely person in front of your very eyes. When you see the results of all your planning, the strenuous work and tiresome tribunals seem to have been worthwhile in the end.

The success of these initiatives is greatly influenced by education. Every parent aspires to give their child the best possible start in life, and mothers place a special emphasis on doing this. According to the LXME Women & Money Power Report, 50 percent of women cite their children's education as their top investment motivator, and 70 percent of mothers are very interested in their children's
education.

By carefully planning and managing your finances, you can provide your child with the greatest education possible. Here are five things worth pondering before you decide to spend your money on your child's education:

The inflation effect

The inflation rate is skyrocketing! Simply said, it indicates that prices for goods and services have gone up. This modification will lower the price of education. Your goal sum will be impacted since it will rise at the same rate as inflation. As a result, when making preparations for your child's education, it's imperative to account for inflation, which typically ranges from eight to 10 percent every year.

Cost of educating your child

You must first choose what you want to achieve. Do you have plans in place for your child's undergraduate or graduate studies and related college costs? Do you intend to send them to famous institutions in India or abroad? Which course does your youngster find most interesting? By supplying the answers to these questions, you may calculate the current cost of education.

Time left for your goal

You should arrange your investment based on your child's age and the admittance age. It is advisable to start investing sooner rather than later. It is essential to begin making investments in your child's education as soon as they are born because it is a long-term process. For illustration, suppose your child is two years old and plans to enroll in college when they are 18 years old. The investment period will thereafter be 18 years minus 2 years equal to 16 years.

Choose the right investment option

Determine the ideal investment option by taking into account your goal, the time you have to achieve it, and your risk tolerance. If your goal is short-term (less than three years), you may want to consider investing in debt mutual funds, fixed-rate deposits, and recurring deposits. If your goal is long-term (more than three years), you may want to consider investing in equity mutual funds, equity ETFs, gold bonds, mutual funds, and other long-term options.