Have you planned for your child’s future?

Diwali storms up the social whirlwig; food, dress up and meet up is all on cards. The usual worry of how to keep the kids gainfully occupied is thankfully averted during such catch ups. They find playmates and enjoy their time, which for us parents is a huge load off.

 This diwali, we too had some great fun socializing. A new parent couple among our friends got talking about how responsibilities are keeping them engaged. Life has been very different after their child’s birth and one responsibility they can’t get a handle on is money planning. More discussions among the group led to finding out that it is a rather widespread question, parents are grappling to figure. It obviously became imperative that a blog post covers the topic of planning our children’s future.

Before setting out on a task, we have to understand what is it going to achieve. So parents unanimously voted Education and Marriage as goals to work for. Both are gargantuan expenses and require disciplined action. Depending on your age, children’s age, your risk profile, choice of education field and costs involved you will have to ascertain a sum required after a said amount of time. We are mentioning the tools you can use for investing. 

SIP

When you keep a horizon as long as your child’s growing up years, SIPs in small to mid cap funds and balanced funds are your best bet. They let your money gain with the benefit of compounding year on year. For those with some risk appetite, consider funds which invest a considerable part in equities of growing companies. Balance funds are slightly less risky because they have equity and debt (such as term deposits, bonds) instruments both.

For the uninitiated, SIP is Systematic Investment Plan better known as ‘the good EMI’. You invest every month a fixed sum as small as Rs. 500 into a mutual fund. The fund is managed by a team of experts and they in turn invest in various instruments to generate returns. We have more posts on MFs coming momeys 😄


Sukanya Samriddhi Yojana
This has to be our favorite for those who have daughters. The scheme encourages parents to build a fund for the future education and marriage expenses for their female child. The scheme currently provides an interest rate of 8.3% p.a. (new rates are likely to be announced). It allows deposit upto Rs. 1.5 lacs in the name of your daughter every year and it matures when she reaches 21 years of age. You can either choose monthly or yearly contributions. Momeys should absolutely consider monthly contribution!

Insurance

Well it’s not our favorite, but we have to bring it into discussion to give you our reasons. If you search online for children investment options, you will find a gazillion ads by Insurance companies luring you with child plans. What should you do? Well our advice would be to ignore. They are mostly selling ULIPs to you which are far inferior in returns to mutual funds and charge expensive premiums. You might as well directly invest in MFs through SIP.

However, we have to add that you must take insurance, as life cover to safeguard your family and children in an unlikely event.

Gold ETFs

Gold ETFs are exchange traded funds that passively track the performance of Gold Bullion. These funds buy gold with investor’s money (on the behalf of investors) and convert it into units. 

Gold Exchange Traded Funds can also be an option if you want to invest for using them during marriage. These are traded on stock markets and are a great alternative to physical gold.

With children, you wouldn’t want to take a chance. So invest today for their tomorrow.

What’s your dream, Mom?

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There ain’t a  mother without dreams for her children. This is true for fathers too but nothing like a mother’s innate love and desire for her kids’ bright future.

Through cinemas, tv commercials, and other media forms, we have grown up picturing a sacrificial mother – Mother India rings a bell? Giving up her own pursuits, subjecting herself to odds at work or around the house yet giving unflinching, unrelenting care is the hallmark of an Indian Mother.

But honestly, other than your love and encouragement, what does your child need to realize those big dreams? The right answer would be – Financial Planning. Have you thought about back of hand calculations of cost of child education? Right from start to higher studies. In future it may touch a few crores. And what about expenses along the way – lifestyle, indulgences for him / her like a holiday, a swanky gadget, special coaching if your child is in performing arts or sports? And Oh wait! The big fat indian wedding is not even getting accounted for. Let’s not get there, as they say.

We know raising kids is by no means economical. Then why not be smart about it and have an investment plan around it? Merely saving up is not sufficient since inflation bites hard into savings. Today’s earnings have to be channelized to meet demands later. Question is, how do you do it? Well it’s nothing short of a scientific process, but an easy one. Through this blog, we will be your friend and guide to make dreams possible. We will give out simple tools, methods and suggestions so you would be able to set your personal & financial goals, make right choices of investments and accomplish your goals.. So you Mom, won’t just be a dreamer, but also an achiever.