5 Things to Do to Safeguard the Future for Your Child

The best way to secure your child’s future is to arm them with quality education, which will give them the right tools to fend for themselves, with or without you. However, a recent article in The Economic Times stated, “Around 47 percent parents are concerned about the cost of higher education, given the inflation rates.” The rising cost of education is not something a parent can do much about, but there are ways to plan your finances so that you can arm your child with the best skills to create a secure future.

Planning for Your Child’s Future

1. Determine your child’s requirements
   The first step to securing the future for your child is to identify what all they will need in future. This includes not just the expense incurred as school fees, but also added costs, such as that of coaching, transportation, co-curricular activities and more. The cost of a child’s upbringing can take up almost 60% of your household budget. You may not be able to determine the exact figure, although if you track your expenses you can get an estimate that can help you determine the amount of savings that will be required to achieve your child’s goals.


2. Buy protection
   Investment alone might not be enough. This is where a child insurance plan can help, providing added financial security for your child in your absence. Getting high insurance coverage means that you will also need to pay higher premiums. Therefore, it is advisable to assess your child’s insurance needs before buying coverage, which you can do with an online insurance calculator. Along with a child plan, buying health insurance is also a wise step.


3. Plan early
   Starting to plan even before the birth of your child is not too early. When you start planning and investing early, your savings grow accordingly, even when it comes to a child insurance plan. A delay in the process of saving can cause financial restrictions, which will force you to overlook other financial benchmarks that are equally important.


4. Allocate assets
   Mutual funds, public provident funds, fixed deposits, equity, etc., can all play a supporting role at various stages in your child’s upbringing. To have the right combination of assets and manage them efficiently, asset allocation is an important step.


5. Prepare a will
   Merely nominating your child to inherit your assets makes him/her a custodian. Ensure that your child receives all that you want them to by writing a comprehensive will to prevent disputes in your absence.
   

Besides taking all these steps, it is also important to sit your child down and speak to them about the importance of saving and managing finances independently.