How to Manage Funds for Your Child’s Study Abroad Dreams?
The number of students considering overseas education for study abroad is increasing. Parents have to plan well in advance of how they will provide funding for their children’s impending dream. Proper planning and management of funds is indeed the best way to start. This blog tries to showcase how you can know how to manage funds and help your child achieve his or her dream.
- Start Early
The amount one can save will directly depend on the time they have invested. The longer your investment, the higher the amount you can save up to realize your child’s dreams. Good financial planning and management is the key to successful saving opportunities. The first step is to create an investment portfolio that will provide you with the exact number of returns when your child is ready to enroll in their dream college. The entire situation will not be overwhelming, and you can start saving up in smaller amounts if you have that kind of time on hand. There are many investment opportunities that will provide you with remarkable returns. The only steps you have to take are to start early and be consistent with your investment.
- Equal Contribution
If both father and mother are earning, it will be comparatively a better investment to put in a good share of money for the child’s future. The goal can be achieved easily and can also help with some extra sums that can be productively used as well. It will also reduce the burden of saving up compared to one parent alone. The goal of saving up can be done at affordable rates and that too in a better span of time. Investment planning by both parents together can rope in some good team spirit, and it will be much more responsible and regular.
- Estimate the cost of education
The cost of education abroad in different countries differs in its overall expenses. The first step is to figure and then circle back to the tuition fees.
Tuition fees and related academic expenses form the core part of the expenses that have to be paid. Additionally, expenses related to accommodation, food, utilities, and transportation follow through. Understanding these expenses will help you figure out how to manage your funds and get them within your goals to be achievable one step at a time. Making wise budgeting will help you provide your child with the best possible future.
- Enlist your sources
Academic funding can be quite an overwhelming affair. So, the first step is to figure out how exactly you are or will be able to provide the funds. There are many external options available for the same, but before going for that, you have to have an idea of the kind of savings you possess. A credible amount of money saved and depending on the rest from third party sources is the ideal way to fund your child’s education expenses. There are many scholarship opportunities and grants available for students to pursue their education abroad.
- Plan Ahead
Even if your child is young and still not even close to the age of college education, it gives you far more access and time to determine how to set up and attain the financial goals by the time they reach that age. Give yourself time and look for options that can give rewarding returns and invest in them accordingly.
- Diversify your education corpus
The normal tendency in Indian households when it comes to investment options is to rightly go forward and get roped into fixed deposits, or FDs. Even though it is not an entirely bad option for investment, the return rates from them are quite on the down side. FDs, gold, and real estate can be considered the safest investment options when it comes to a child’s education. There are many other investment options that can actually get you much better returns, and if it's for the long term, the better. Investing in equity markets both in India and the US is a good place to start with. Dollar investments are definitely a boost when compared with rupee-wise investments, especially when it's for higher education abroad.
Rupee-based investments can be cumbersome for education abroad because if there is a constant depreciation of the Indian rupee against the dollar, it will increase the tuition fees eventually and make it an even more difficult choice. Diversification of investment opportunities in dollars can actually help with better purchasing power.
- Periodic review of investments
Reviewing your laid out investments once or twice a year is good practice and the best way to evaluate how your investments are doing. If you feel that your investments are functioning poorly, you can redirect your investments into better portfolios and save time and earn better returns.
- Choosing the right platform to save
There are many different platforms that you can choose from to lay out your financial goals for managing funds for your child’s higher education. You have to scrutinize productively and make sure that the platform that you choose will aid in realizing your financial goals and be able to keep up with the rising expenditure on education. The platform that you choose to invest in for your child’s education should be elaborate enough to consider the inflation in tuition fees, accommodation, and the entire encompassed cost of living expenses. Choose a platform that has investments in multiple asset portfolios. Even if it's known that equities are the best investment option when it comes to getting higher returns in the long run, it would not be bad to have the option to invest in fixed deposits as a safe bet. Choose the platform that will give you the best possible option for your child’s education.
- Consult an investment advisor or a study abroad consultant
If you are completely new to this and have no idea where to begin, but are certain that your child will benefit from an international education, it is best to seek the advice of an investment advisor to begin with. Investing with the right idea is the best way to ensure that you don’t blindly invest in financial opportunities that you have no idea about. They will help you plan out the most effective strategy for getting your kid’s dream into reality.