When it comes to future of your child, you do not think twice. You will do whatever it takes. You can build it brick by brick and one step at a time without hurting your finances. Mutual Funds are a way to go.
Here are 5 steps to secure your child’s future with mutual funds 1. Set Goals: Know the purpose you wish to save for and invest the money accordingly. It could be an international school admission or a professional degree at a university. Set your sight on a figure that will ensure your child gets the education he or she wants.
2. Save First: Once you know your goals, set aside some money before you spend the rest. It is important to get into a good savings habit every month as this is the stepping stone to your child’s secured future.
3. Start with SIPs: A way to get into a discipline of investing is by using SIPs. Systematic investment plans or SIPs help you in ‘rupee cost averaging’. This means you buy more units when markets fall and lesser units when markets rise. You can start with as little as Rs 500 every month.
4. Use SIP Top Up: As your income grows, you could boost your allocation to SIPs by using the SIP top up. This increases the amount you set aside each month for your child’s future. A timely top up can make a significant difference to the final amount you receive when you need it.
5. Do not stop investing: You must continue with your monthly MF investing habit till you meet your goals. If you stop investing for some reason, figure out a way quickly to replenish the child education kitty. The more you stay away, the more you hurt your prospects of reaching your goals on time.
It makes sense to allocate your SIPs into diversified equity funds. You money grows along with your child. To reap the benefit, you need to give your money that much time.
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