Education is a powerful weapon. You can change the world or your child’s world with the help of good education. In this highly competitive world, parents are determined to give their children the best. Send your child to the best school, ensure your child is the best student, get the best birthday gift and the list goes on! So why step behind and settle for less when it comes to higher education? Foreign universities give a big opportunity to provide a global platform for your child’s career.

Even the best college, in India or abroad, come with a price tag. With the impact of a rising inflation rate, the price tag associated with higher education is often a hefty one. Therefore, it is imperative for every Indian parent to have a sound financial strategy in place. With a dedicated investment plan, a parent can easily help accomplish their child’s education goals.

However, the scenario with millennial parents is different. Millennials are saving on average 11 per cent of their income which is significantly lower than the recommended 30 per cent of income, after all, expenses. It is difficult for millennials to save a larger chunk of their salary, given the ever-increasing expenses and splurges made on lifestyle, travel and more. According to the estimates, 10 per cent of millennials travel six-ten times a year and about 62 per cent of millennials travel two-five times a year.

But why are millennial parents so important, you ask?

Because millennials make up for 46 per cent of India’s workforce and contribute 70 per cent of the national household income. Millennials are those who were born between 1981 and 1996, and they are the driving force of our country’s economy.

For parents, planning and saving for their child’s educations should become a top long-term goal. Here are a few tips you can follow to secure your career goals.

Identifying goals

Providing children with an opportunity to study abroad starts with clear goal-setting. Many parents focus on setting academic goals for their children and helping their child be exam-ready. But as parents, are you financially ready? From my own journey, I know and recognize that there lies a gap between being academically ready and financially ready. Therefore, parents must focus on saving for their child’s education while their child studies hard to score good marks.

Syncing academic goals with financial goals will give parents an advantage and will be helpful in case of any deviations. If you start a Systematic Investment Plan (SIP) of about Rs 5000 per month and continue it for 15 years, with an expected annual return of 12 per cent can expect it to grow to Rs 22.37 lakhs.

Speaking to a counsellor

Parents of millennials can seek professional advice from an education counsellor as well as a financial expert. If you are planning to send your child to a foreign university, connect with the study abroad counsellors to understand the fee structure and other expenses of international universities. It is extremely important to understand the true costs of education. To do so, you can analyse the pattern of fee hikes, other expenses and even use tools like an accurate college savings calculator.

Right investment decision

Accumulating a good corpus amount is easy if you start saving from the right age. Instead of having a dependency on a loan as Plan A, one should save some portion (irrespective of the SIP amount, no matter how small the corpus is) from an early date so that tomorrow, if aspirations change you can use a loan as a plan B to fill the gap.

As a parent, you can look for a better option to invest your money in a plan that can offer good returns in future. Delaying the investment, putting money in the wrong plan or parking it in the bank might not get you the desired corpus. A smart parent would start investing in Mutual Funds in a systematic manner.

Bottomline

Parents who already have a child should start planning for their child’s education by investing in stocks or mutual funds regularly. The power of compounding will help you reap good returns if you stay invested for a longer duration. As a parent you can sleep peacefully, knowing that, your child’s future is secure. You won’t have the stress that comes with huge tuition fees as you would have already started gearing up for it.

The author is the Founder of EduFund

DISCLAIMER: Views expressed are the author's own. Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.