Financial planning for children is essential to make their future secure and help them achieve more in life. Therefore, it is necessary for parents to be aware of the different phases where financial planning for children is required. Read on to know more about financial planning for children.
Bringing-up child as a successful and responsible individual
is a dream of every parent. Almost every parent sacrifices his or her own
desires and wishes to make their childâ€™s future secure. Many parents also face
lot of hardships to save money and fulfill their childâ€™s dream. Parents even
stop caring about themselves when it comes to the career and future of their child.
However, planning the future of children is incomplete
planning for them during each and every stage of their development. Have a
quick look at different phases where financial planning is needed for growth,
development, better career and better future of children.
A financial planning start even before the child is born.
Preliminary financial planning involves financial planning for giving birth to
the baby. Such expenses may include hospital bills, medication, IVFs etc. It
may include some expenses required for taking care of babyâ€™s health too.
Daycares, Creches and
Normally working mothers prefer to take leave from work to
take care of their babies for at least 6 months to 1 year. Once the baby
becomes older they decide resume work. Therefore, to continue work, mothers
need to take services provided by daycares, creches and nannies. Parents need
to take care of such expenses also. However, in India many working mothers depend
on their mothers or mothers-in-law to care of their babies when they are
As the baby grows-up parents need to admit them in
pre-schools. It is this time when parents introduce their child to a new world.
As such it becomes important for them that they enroll their child in a
pre-school which prepares their minds for entering schools for primary
education. At the same time they want to ensure that the environment is safe
and hygienic. To provide all these facilities to their toddler parents have to
spend a good amount of money on the pre-schools
Getting educated from a
good and reputed school is the first step towards bright future. However,
taking admission in good schools is not so easy. Along with the payment of
donations of schools, parents also need to spend money on
school fees, tuition fees, books, extra-curricular activities etc. Therefore,
parents need to plan finances properly for enrolling their apple of eye in good
To make sure that child chooses one of the best career
options, it becomes mandatory for parents to arrange finances properly for the
same. However, these days many insurance companies are providing excellent
education plans. Such insurance plans ensure parents that financial problems do
not become a hurdle for providing appropriate education to the child. Todayâ€™s
competitive age makes it obligatory for all parents to choose proper plan for
their little wonder so that he or she can choose a career option according to
his or her desire.
Many Indian parents also plan for the prospective life of
their child. Especially in case of female child, parents are very particular
about saving money. This saved money is thus utilised during weddings.
Some Facts and
According to Finance Minister P Chidambaram, today's
education system has become a money spinning machine. Education has become a
source of making money and profit here in India. The minister says that
education should not be a profit earning business.
According to the minister, higher education after school
education of children plays a very important role in the development of the
According to him, â€śWhen all over the globe, 40 per cent of
the school-going students make it to colleges or universities, in India
only 11 to 12 per cent of the students make it to the higher education section.
This should be changed," he said.
As per recent statistics, education costs are rising at 10%
per annum from last couple of years. Ten years back, you could have done an MBA
at 1.25 or 1.5 lakhs, but the same will cost more than 4 lakhs today.
If your child is currently 5 years old, and you have
estimated the cost of his future education at Rs. 10 lakhs, then the purchasing
power of that money will be reduced over the years due to inflation. What you
can buy with 10 lakh rupees today cannot be brought a couple of years later
with the same amount. The value of 10 lakhs will reduce over the years, so the
amount required to be saved is more.How Financial
Planning Can Help Achieve More?
Here are some of the benefits which can be derived form
financial planning for children.
is availability of funds to supports childâ€™s career goals. Therefore, the
biggest hurdle to childâ€™s success is removed with an ease. It brings child
closer to what he or she wants to achieve in life.
proper financial planning, there is no need of taking educational loans.
Educational loans become burden on children at an early age. With such
burden, it is difficult for children to focus on studies.
are also relieved from the expenses
which they have to incur in future if they do proper planning at present.
As such they can also pay attention on how they can fulfill other needs of
their child so that the child can achieve more in life.
parentsâ€™ financial planning comes planning for the future of the child.
Since parents and children decide about the future in advance, it is
easier for them to cope with stress and tension and as such achievement is
with childâ€™s hard work, proper financial planning done by parents act as a
base for better future of child.
Once children get married parents are free from their responsibility. However, a new financial planning begins with the end of financial planning for children. As the couple starts heading towards old age, they have to think about the availability of finance during this stage. But this issue can also be taken care by selecting a proper pension plan. Thus, financial planning has become easier due to the growth and development of insurance sector in India.