Parents are always worried about their children future. They do all possible means to give their ward a bright and secure future .Parents across the world are concerned about their children’s future and work hard to ensure it through every possible means. Although parents in India are hardly an exception, many of them fail to make proper financial arrangements.
In today’s scenario the role of a parent has become more challenging as a result of micro and macroeconomic threats such as increased inflationary pressure, the depreciation of the Indian rupee, and the possibility of a global recession.
Here are a few ideas that help in protecting your children’s financial future:
- Do not postpone investments: Planning ahead of time allows you to invest for your child while also diversifying your portfolio and allocating more assets to equity for higher returns. The most typical mistake made by parents is to believe that they have enough time to achieve their financial goals and to postpone investing in their child’s future.
- Determine short-term and long-term goals: Because not all financial goals have the same maturity, it is vital to invest differently to save for schooling funds and a fund for higher education. Goal-based investing is driven by specific needs, time horizons, and risk-to-reward ratios. As a result, setting short and long-term goals for your child’s financial future is critical.
- Efficient asset allocation: Your capacity to invest based on your goals, preferences, and risk tolerance is dependent on efficient asset allocation. By allocating your assets depending on your goals, you may ensure that you will have the right investment returns at maturity. Depending on your objectives, you have a range of options, including mutual funds, fixed-income instruments, and more.
- Insurance: Don’t forget to add your children in the health insurance floater for your family. Having enough health insurance is just as important as saving enough money for your child’s future. Children are prone to a variety of ailments, and at such a young age, they are more likely to contract them while playing or as a result of infections, and the treatments can be costly, therefore insurance is a necessary.
- Teach financial literacy early on: As a parent, you must instil financial literacy in your child if you want them to be financially independent adults. Your responsibility to teach your children financial literacy will teach them how to value and manage their money.