Best 5 ways early saving can help a child’s future
If you are planning to send your child overseas for higher studies, here are 5 ways early saving will help your child’s future career. Depending on the career your child decides to pursue and the country where your child wishes to travel, you will require a corpus of anywhere from Rs. 25 lakhs to up to Rs. 1 crore. And as you can imagine, these funds need to be planned for and accumulated over time.
Here is why early saving will help your child’s future career
Start saving early to build a larger corpus
It is difficult to assess the career your child will ultimately pursue almost 15 years from now, it is best for you to go big and work with a higher target. This way your child will have the freedom to choose whichever career appeals to him/her, without you stressing out about how you are going to fund it.
You will not need an education loan
While education loans are quite commonplace these days, if you plan well in advance, your child will not need to apply for education loans. No matter how easy they are to get, you must remember that most students end up having to commit a substantial portion of their 7-9 years’ earnings in the initial years towards settling these loans. If you plan well and start saving early, you can spare your child the stress of this loan.
Zero hassle of getting education loans
While education loans are many today, the competition for these loans is going up as more and more students aspire to go overseas. This means by the time your child is ready to travel for higher studies, these loans will be harder to get and will definitely be more expensive than they are today.
Also, loans that are easily available are provided against high-value collateral. If you do not have the necessary collateral with all required documentation, the loan will not be sanctioned. Further, if your loan application is rejected for any reason by even one loan provider, it will create a lot of hurdles for you when you apply to other lenders.
All of this stress can be avoided if you have your own funds to put your child through college with your funds.
No fear of repayment
Different lenders have different repayment terms. Some need the student to start repayment even during the study period. Others, once the course of over and the student starts working. In both cases, this becomes an additional area of concern for the student.
Managing a job while studying overseas is not an easy task. Even if the repayment schedule starts to post the course completion, it implies the student will be forced to take up a job even if he/she prefers to study further.
As you can see, there is no need to put your child through all these challenges. All you have to do is create and follow an effective savings plan that will help you save your funds and grow them through compounding over an extended period of time.
Builds healthy financial habits
We all know that our children usually follow what we do when it comes to financial behavior. By saving early on, your child will be able to pursue the career of his / her choice and will be free to start work when he/she feels ready.
Most children, having experienced the ease of access to their own funds, realize early on that saving for a bigger goal in the future is important. Your decisions today will encourage your child to put away their own funds for their future career and personal goals.
It may seem like an obvious adage to start saving for your child’s higher education. But most parents make the big mistake of waiting for their child to go off to college.
By saving diligently, it can be the game-changer that your family needs to shift to a whole new level of success in just one generation. So, ensure you start your savings today!