Are you saving enough for your child future?

Are you saving enough for your child future?

Children’s day is round the corner and it will be the precise time to think about the children’s future. Children’s play a huge role in everyone life. Parents play supportive role in every phase of the child. It’s up to us to create the secure future for child by identifying the goals and planning to achieve it by investing systematically.

Mentotax has identified major financial goals for securing child future that needs to be given importance.

Short Term Goals
Goal	Amount Required Now	Time Horizon	FV	Savings Required	Invest In
Baby Functions/ First Birthday	₹ 2,00,000	1	₹ 2,10,000	₹ -16,868	Liquid & Overnight Funds/RD/FD
School Start	₹ 3,00,000	3	₹ 3,47,288	₹ -8,567	Liquid & Overnight Funds/RD/FD
Long Term Goals
Goal	Amount Required Now	Time Horizon	FV	Savings Required	Invest In
Coaching Class for NEET/IIT	₹ 3,00,000	15	₹ 6,23,678	₹ -1,248	Dynamic Asset Allocator/BAF
Children Graduation	₹ 20,00,000	17	₹ 45,84,037	₹ -6,932	Equity & Equity Diversified Funds
Children Post Graduation	₹ 35,00,000	21	₹ 97,50,869	₹ -8,649	Equity & Equity Diversified Funds
Children Marriage	₹ 75,00,000	25	₹ 2,53,97,662	₹ -13,518	Equity & Equity Diversified Funds

There are various avenues to invest for child future, Recurring Deposit, Fixed Deposit, Sukanya Samriddhi Yojana, Post office savings, Mutual Funds, Endowment and ULIP, Public Provident Fund, Gold, Equity Linked Savings Scheme, Child Gift Funds.

Example Child Higher Education:

Assume after 17 years you want to send your child for higher education which costs Rs 20 lakh today. To save Rs 20 lakh after 17 years, assuming a return of 12 per cent, you need to save monthly SIP of Rs 2650. But on considering inflation of 5 per cent, will bring Rs 20 lakh to Rs 8.75 lakh after 17 years. Therefore, before starting to save for your long term goal, make sure you have estimated the inflated cost and then do SIP.

In the above example, Rs 20 lakh after 17 years at an assumed 5 per cent inflation and at expected return of 12% will actually cost you Rs 45.85 lakh. Now to achieve it, you actually need to do SIP of Rs 7000 instead of Rs 2650.

Mentotax recommends you to invest in equity considering the longer time horizon. Mentotax suggests you consider inflation, expected return based on the products before starting the investment. To achieve the financial goals and secure the child futures start investing early and enjoy the benefits of compounding.

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For more details: mentotax@gmail.com