What is the right time for your clients to start investing for their children? Is it after their children join school or after they are born or is it even before?
No matter which strata of society your clients belong to, they will want to send their children to a top school or college.
Considering the rate at which education expenses are increasing, it is better to encourage your clients to start investing even before the child is born, say advisors.
Srikanth Matrubai of Sri Kavi Wealth Advisors suggests his clients who are bachelors to start putting aside money for child education. “Though your clients might feel that there is still a long way to go to plan for their children, I encourage them to start putting a small amount for this goal. I explain to them the impact of increasing education inflation and how they can beat it by putting aside a small amount every month,” he says.
Amol Joshi of Plan Rupee feels that advisors must raise the topic of child plans when their clients are about to get married or have recently got married. “Though they might not be thinking of having kids in the near future. However, by the time they realize the need to invest for their children, they will have to contribute higher amounts considering the rising inflation. Many a time, one of the partners will have to quit their jobs to take care of the child, which means reduced income. I tell my clients by planning early they not only ensure that they have adequate money for their child’s education, but also a separate fund to manage cash flow when a spouse leaves job,” he says.
Melvin Joseph of Finvin Financial Planners encourages his clients to start investing for their children when they are expecting the child. “Today getting a child into playgroup itself has become costly; especially in metros the cost of primary education is steep. When I ask my clients to start investing for children I recommend them to make three separate and distinct funds. The first is for primary education and schooling, the second for graduation and the third for post-graduation,” he says.