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How to Secure Your Child's Financial Future?
It is every parent’s responsibility to ensure that their child has the necessary financial support to achieve their dreams. The task of raising a child can be quite challenging especially when they start growing up; that is when the expenses begin. This challenge presents an opportunity – get disciplined and save money to secure the future of your children.
And to make that happen, it is necessary to have proper financial guidance to achieve financial stability.
How to Plan Financial Investments for Your Child’s Future?
The best way to plan your child’s future is to understand his or her dreams and aspirations. You can do so by talking to your children and learning about their interests. It will give you a fair idea of what they want to be in their life, and you can make plans accordingly. This way, you can plan the roadmap for the next 15-20 years i.e. how much money they would need to achieve their goals. One of the best ways to make sure of that is to invest in child education plans.
In general, the best way to plan your financial investments is to evaluate your monthly income, expenditure, savings, debts and liabilities. It will give you a fair idea of how much you can save and invest to secure your child’s future. You can also invest in life insurance policies, endowment as well as term, for accumulation and contingency, respectively.
Here are some investment options to consider for securing your child’s future:
Child insurance plans provide financial assistance at crucial stages of a child’s life. The best thing about a child insurance policy is that it helps to protect your child’s future even in your absence. This means that in unfortunate scenarios where the parent passes away, the premium is waived off and the nominee still gets the maturity amount at the end of the policy.
Term Insurance Plan
A term insurance plan is a life insurance policy that helps to provide financial coverage for a specific period of time. In essence, a backup financial cover that provides financial protection to the beneficiary even if the person insured unfortunately passes away.
Fixed deposits are the best way to secure your child’s future. The best part about fixed deposits is that they offer a good interest rate. Not only that, fixed deposits are the safest form of investment since they guarantee returns on your investments.
Mutual funds are an ideal choice for parents looking for ways to invest their money. Mutual funds also have low trading costs that make them more affordable for low-income families. You can start your investment with as little as ₹500 in a Systematic Investment Plan (SIP).
Buying stocks can also be a good way to invest in your child’s future. Even though the stock market is known for being quite volatile in nature, it can prove to be quite beneficial in the long run especially if you take your time to study the market conditions and look for stock(s) that has been performing consistently. This way, you can multiply your investment in a short span of time in comparison to other traditional investment schemes.
Unit Linked Insurance Plans/Endowment Plans
Unit Linked Insurance plans are considered to be a low-cost investment option. Helping you to save money, they can be used to invest in other options such as stocks, mutual funds or bonds. When done with due planning, ULIPs provide a well-integrated investment plan that can help to secure your child’s future.
It is the duty of every parent to fulfil their child’s dreams by making the right investments at the right time. This requires careful assessment of your income, savings and liabilities. You can also seek professional assistance from investment experts who can guide you through the process.
At Muthoot Finance, you can consult with our investment experts who can understand your investment objectives and then recommend the right investments and child insurance plans. Visit your nearest Muthoot Finance branch to discuss it in detail.