Financing your Childs Future
By: will smithston | Posted: 16th June 2007
Today, we all know that prices are sky high and our demands are hitting
the roof. Spending has catapulted rapidly. There was a time when
parents didn’t have to bother about personal finances but today the scenario
has altogether changed. A parent today is far more concerned about
expenses and how they are going to be met. Is it the banks and investment
planners that have created a change in the mindset of parents that they
cannot do without financial planning or is it truly a need? This
question stands debatable.
Pros and Cons
For a parent, financing his Childs education is of prime importance.
Future is uncertain and this very point is striking the brains of parents
today. The Childs insurance needs are also being looked into, well in
advance. Various strategies are being arrived at, to fund children’s’
education and future. Financial planners and fund managers are hitting
upon new techniques and strategies targeted at children. Parents are also
seeking answers to this problem as it is giving those sleepless nights.
While some parents live for the moment others are trying to scratch
their foresight.
Giving your child insurance and educational benefits:
1. Bank savings interest rate has dropped marginally. New options to
multiply your money are the need of the hour. Invest in mutual funds.
Mutual funds come with a promise and a person can earn a huge sum of money
as an interest payment. These are also attractive for their low risk.
The returns generated here can be used for your Childs future.
2. Invest in child policy schemes. Various child policy schemes have
been introduced by commercial banks. These have a certain lock-in period.
Generally it varies between 1-10 years. A lump sum is earned after the
lock-in period and can prove to be very helpful at the stages when you
need money in the future.
3. The benefits of investing in these schemes have long term as well as
short term implications. On the short term one can enjoy an exquisite
living. The needs of your child have been catered to in advance. In the
long term there are no financial hassles due to the investment you do
now. The Childs educational needs will be easily met. Besides that,
there is a huge potential for returns. Many companies offer more than 30 %
returns and this money too can be used wisely later.
4. The parents in a nuclear family have the option to include their
child in the life insurance policy as their beneficiary. The plans should
be decided based on your objective. It may be to fund a Childs
education or give him long term benefits in terms of money. Thus putting the
child as the beneficiary in an insurance policy can meet the Childs
financial requirements for various purposes like education.
Written by Will Smithston. Striving to achieve financial freedom? Join
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Tags: pros and cons, sleepless nights, mindset, sum of money, brains, interest payment, lump sum, mutual funds, fund managers, financial planners, financial planning, s education, commercial banks, personal finances, foresight, prime importance, term implications, educational benefits