Everyone wants the best for their child. Nothing that is satisfactory is ever going to be enough. The best standard of living, the best food, the best education, basically, the best of all worlds. But it has become such that the best comes at a cost, that is sadly not so cheap. While there is no way to reduce the prices, what we could do, for our children, is to plan our finances well, so that we make sure they have all that they need and more.

Here are a few tips that help in financial planning for your child’s life

• Make different plans for different reasons: 

  While planning, keep in mind that all the financial requirements are not immediate. Some financial requirements, like maternity expenses are needed the minute your child is born. Some financial needs arise when you r child has to go to college. Keep in mind the reason why you are saving up. This will help in the long term.

• Separate your long term financial needs from your short term financial needs

  The beauty of investing for the long term is that one can invest in options that are less risky as short them options. One can take advantage of the fixed lock in periods which offer guaranteed high returns at the end. For short term goals, one can rely more on liquid investments which they can encash any time they need.

• Invest early

  It is never too early to start investing. Any amount, no matter how small is too small to be invested. You would rather start with small amounts early than with larger amounts later on. No one knows what the future holds, so invest what you can, while you can.

• Diversify your investments

  Don’t put all your eggs in one basket. And that being said, look beyond your regular savings bank accounts. Savings accounts are a good fool-proof option for investment, however, they offer minimal returns. Invest in mutual funds, ULIPS and other schemes. Companies like Aviva have great unit linked insurance plan options that one can opt for, which are curated for things like a child’s education or other. Public provident funds (PPFs) are a popular long term investment option as they offer the power of compounding interest while the advantage of a guaranteed return with no risk.

• Consider partial withdrawal investment plans

  
  These plans can help with any intermediary expenses that may arise. 15-20 years are often the lock in periods for long term investments, however, most people may not have that much time on their hand. Here is where partial withdrawal plans can be a boon. What is the point of investing all you money in plans where you cannot withdraw even in case on an emergency?

As parents, we want to do what is the best for our children too. Companies like Aviva understand that and provide a solid foundation from where to start financial planning. 

AN Feb 39/22

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