How to plan finances for your child’s education – Advisor Forbes INDIA

There are common financial goals that everyone is working towards, like buying a new car or paying for your child’s foreign degree. What is different is the level of planning involved in achieving these goals. How much money you set aside for each goal, how often you reassess your portfolios to check if you’re on track, or how often you check to see if all your goals are on schedule, which gives you distinguishes itself from other savers.

Your checklist of things to do if your planning is off track

Investment markets are volatile and unpredictable; you don’t know how the market will behave tomorrow. So you might not be on time for all of your goals, and it’s okay if you’re off track. What matters here is not that you are off track, but rather your ability to take corrective action to get around it.

Let’s look at some corrective measures that can help you get back on track and achieve your goals:

Check if you have time by your side

You can always put off some goals, like a trip to the Bahamas, for a few years. It gives you time to accumulate money and execute plans when you’re ready, but there are events that can’t be delayed. For example, your child’s baccalaureate. It’s something inevitable and it’s a definite goal. While you can put off a master’s degree for a few years, you usually can’t put off a bachelor’s degree. To achieve such goals, you need to keep an open mind and consider different alternatives to achieve them.

Analyze if you can reduce your target

It works wonders when you prioritize your financial capability over your aspirations. For example, if you have always dreamed of giving your child the best education but you do not have the necessary financial means, to ensure that your child always receives a quality education, you can choose to change the preference. university for one that fits your current/budget. goal corpus. If your child’s college costs INR 40 lakh but you can only save INR 25 lakh; you may consider changing colleges depending on your financial capacity.

See if you can increase your investments

As an investor, you always want your portfolio to balance your risk appetite and provide you with enough returns to achieve your goal. However, the market is not as rosy as one might think. When you find that you are not on the right track, try to assess whether you have the possibility to complete your portfolio.

A lump sum add-on in an erratic market often helps get you back on track. This is only applicable if you have time on your side. Consider this, if you’re saving for a child’s education, and in 2021 and 2022 – market volatility has eroded your portfolio wealth. To get you on the right track, you can supplement your portfolio with a lump sum if you have more than five years for the set goal.

Find alternative solutions to finance your goal

This applies more to inevitable goals that will come at a specific time in your life. Like your child’s education. Suppose you started planning for your child’s higher education early and your estimated SIP was INR 10,000 while you could only make INR 7,500.

The gap of INR 2500 every month will cause a big gap between where you should be and where you are in the target. Suppose you have a 10-year horizon for your child’s middle school; you will be short of INR 7 lakh for tuition. In such cases, you may consider opting for other financial instruments such as student loans to fund your balance.

Save more every year

It’s a great tool for achieving your long-term goals. To save more each year, you can always use the Step-up SIP option to fund your goals. In Step-up SIP, your SIP amount tends to increase by x% (you decide this x%). Since your earnings are likely to increase by a certain percentage each year, Step-up SIP is a great way to increase your body of goals later in your goal.

Work together to save more

It’s easier to reach your goals if you and your partner are constantly contributing to them. If you plan your goals with your partner or spouse and agree on them, a joint agreement can be reached on the goals such as reallocating money, contribution amount, changing the goal amount, etc. .

Study the impact of the market on your portfolio

When managing your finances, you need to understand the factors that affect your money and your overall portfolio. While you may have a financial expert whose advice you find trustworthy, you need to do your research and keep up to date to ensure you stay on track to achieve your financial goals.

Update your goals and dreams

Humans are social animals; our needs and wants change over time. As your family grows or your career progresses, our priorities will change. You may need a big car because you now have a husband and child or a bigger apartment to have room for everyone. Reviewing your financial goals or dreams can help you determine how much money you need to invest or whether you need to upgrade certain plans. Consider this,

Item A: You started saving for your child’s college education when they were born. You don’t know which course he/she would choose, and therefore, you are aiming for an amount of INR X.

Point B: After seven years, you find that your child is good in mathematics and would like to do a bachelor’s degree in mathematics in India. Accordingly, you would adjust the target amount for a math course.

C-point: After another seven years, you find that your child is inclined to take a course in statistics. Thus, you change the target amount.

D-spot: Finally, at the time of admission, your child is taking a Data Science course abroad, and you need INR Y for the course.

In the above scenario, if you don’t update your goal frequently, chances are you are off track. Your child’s dreams are not static, as above, they might want to go abroad to graduate, which means you have to factor in the costs of currency depreciation and the high cost of living . Thus, it is crucial to reassess your goals and priorities to set the target to reflect the revised goal.


As you invest, some investments will perform better than others, and each investment will bring a different level of risk. You will need to rebalance to ensure that your portfolio still reflects your risk, which is a function of factors such as time horizon, income, expenses, dependents, etc. You may need to reallocate your investments to another asset class where you believe the returns are reasonable and match your level of risk. The act is called rebalancing and is necessary to ensure that you are optimized whenever you are exposed to the market.

Stocks and gold are inversely related, and it can make sense to reallocate funds from stocks to gold and vice versa when economic and market developments change. Also, over time, as you progress and get closer to your goal, it’s important that you move money from high-risk assets to low-risk assets and start saving. profit by parts.


As an investor, your job is not done when you start an investment! You need to make sure your goals are evaluated and adjusted based on your dreams, market changes, and constantly aligned with your financial needs. Additionally, you should assess the performance of your portfolio and take corrective action by increasing your investment amount or horizon (if possible) to achieve the goal if you feel you are not on track to reach the goal.

Finally, it’s good to remember that you can always consult with your financial advisor about other ways to get back on track and move aggressively towards your goals.

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