How do I plan for my childs education expense

The starting point for this important goal would be arriving at a target amount. While setting the target amount for Child Education Goal, make sure you don’t ignore the impact of inflation on the future value of the goal amount, as most people do.

An amount that seems sufficient in today’s terms may prove to be inadequate when your goal date arrives. If you’ve got time on your side (for instance, if your child still has 7 years or more to go before her higher studies), go for SIP’s in aggressive small- cap or and mid-cap oriented funds, regardless of your risk tolerance. Don’t let risk aversion come in the way of your benefiting from the long-term compounding that could accrue from more aggressive funds, as volatility actually works in your favour over the long term.

Following is a step wise guide towards creating your childs education goal:

• Define your objectives: Clearly outline your educational goals for your child. Consider factors such as the type of education you envision, the level of education (e.g., undergraduate degree, Post Graduate degree, Professional Degree), and any specific academic or extracurricular aspirations you have for your child. 
• Research educational costs: Research the current and projected costs of the type of education you desire for your child and actor in inflation when estimating future costs.
• Assess your current financial situation: Evaluate your current income, expenses, savings, and investments. Determine how much you can realistically allocate resources towards your child's education fund without compromising your other financial goals, such as retirement savings or emergency funds.
• Invest wisely: Understand risk and take informed risk while investing. Set your expectations right from your investments. Choose a fund that appropriately matches your goal tenor and risk tolerance
• Set your childs education goal: Based on your education goals and estimated costs, calculate how much you need to save each month or year to achieve your objectives. Use online calculators or consult with a financial advisor to determine the appropriate savings target.
• Automate your savings: Invest systematically by way of an SIP (Systematic Investment Plan) and ensure consistency, longevity and disciplined saving. Treat your child's education fund as a priority expense and allocate funds accordingly each month.
• Review Portfolio: Regularly review your progress towards your education savings goals and accelerate or step up your investments regularly in order to achieve your goal faster.

By following these steps and staying committed to your child's education goals, you can lay a solid foundation for their future academic success without compromising your financial well being.