Hi sir my son is 6years now, tell me some of the saving plans for his education

Ans: Planning for your son’s education is a thoughtful step. Starting now gives you a great advantage. With your son being 6, you have 11-12 years till higher education. That time is precious. Your savings strategy must be focused, simple, and inflation-beating. Let us assess it deeply.

Here’s a detailed, practical, and 360-degree saving plan approach from a Certified Financial Planner perspective:

Understanding the Time Horizon and Goal Type

Education is a goal with a fixed timeline. It cannot be delayed.

Inflation in education is high. You need a strong plan.

Short-term plans will not work. You need a long-term view.

Education cost grows faster than household expenses. So start early.

Cost can go 7 to 10 times in next 10 to 15 years.

Segregate the Goal into Phases

First phase is school and early years. This is short-term.

Second phase is college and post-graduation. This is long-term.

Both phases need different saving tools. Mix of assets is key.

Long-term goals need equity-focused solutions. Short-term can use stable tools.

Start a Dedicated Child Education Fund

Keep this goal separate from others. Don’t mix it with retirement.

Avoid using this fund for other emergencies.

Discipline is important. Stay regular and patient.

Keep reviewing it every year. Make changes only if required.

Use a Proper Asset Allocation Strategy

For longer goals like college, go for growth-oriented investment tools.

Use equity-based mutual funds through MFD with CFP guidance.

For shorter goals like school fees, choose low-risk options.

Split investments in growth and safety-based buckets.

Keep liquidity for fees that come soon.

Equity Mutual Funds for Long-Term Education Goal

These are managed by experts and have inflation-beating potential.

Don’t use index funds. They blindly copy market.

Index funds can’t manage risk in market drops.

Actively managed funds aim to beat market with better strategies.

Choose regular plans through an MFD with CFP help.

Direct funds may look cheaper. But they lack expert handholding.

Without MFD advice, you may stop SIPs in panic.

Regular funds help with discipline and behavioural coaching.

You get personal review, portfolio tracking and rebalancing.

Debt Mutual Funds for Medium Term

Use for fees due in next 2 to 4 years.

Debt funds are safer than equity, but give better returns than FDs.

Choose funds based on interest rate cycle and duration.

Taxation applies as per slab rate now. Plan accordingly.

Don’t withdraw before goal unless very urgent.

Hybrid and Balanced Approaches

Hybrid mutual funds mix equity and debt. They give better stability.

Good option when goal is 5 to 7 years away.

They reduce risk during market falls.

Returns are also smoother than pure equity.

Systematic Investment Plan (SIP) is Best

SIP gives rupee cost averaging benefit.

It keeps you consistent. Helps reduce emotional decisions.

Works well with long-term goals like college education.

You can increase SIP as income grows.

Monthly habit builds big corpus in long run.

Keep an Emergency Fund

This fund is not for child’s education.

But it protects you from breaking child goal investments.

Keep at least 6 months of expenses in liquid form.

It will help during job loss or big medical needs.

Avoid Traditional Insurance-based Investment Plans

ULIPs, endowment, and child plans are poor return options.

These mix insurance and investment. That is not efficient.

If you already have such policies, assess their returns.

If returns are below 6%, surrender and move to mutual funds.

Use separate term insurance for life cover.

Use mutual funds only for investment. Don’t mix both.

Education Loans Can Be Helpful If Planned

Use loan only if your fund falls short.

Don’t fully depend on education loan.

Interest rates are high. Repayment starts soon.

Planning now avoids future loan stress.

Track Education Cost Every Few Years

Fees increase every year. Monitor it carefully.

Track inflation. Adjust your SIP as per new need.

Don’t stop investing once SIP is started.

You may need to increase SIP every 2 years.

Use Milestone Approach for Withdrawals

Don’t redeem everything at once.

Plan withdrawals based on college semesters or fee terms.

Redeem from equity when markets are good.

Shift money to safe funds 1-2 years before fee is due.

Avoid market volatility just before using the fund.

Review Your Plan Every Year

Every year, check your progress.

See if SIP amount needs change.

See if risk level of fund still matches your timeline.

Use MFD with CFP certification for yearly reviews.

Don’t do changes without good reason. Avoid panic.

Keep Goal-Based Investing Discipline

Don’t use child’s fund for luxury or vacation.

Protect it like your own future.

Celebrate milestones in your goal journey.

Talk to your child about value of money.

Final Insights

You are planning at right age. That gives you a good head start.

Use mutual fund SIP with proper guidance.

Stay invested. Review yearly.

Use separate term insurance for protection.

Stay disciplined. Don't pause the SIP without strong reason.

Don’t fall for high-commission child policies.

Work with a Certified Financial Planner. Take expert help regularly.

Make your plan flexible. But stay focused on the goal.

Don’t get distracted by short-term returns.

Think of your son’s future. Stay committed.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment