Saving for your child’s education abroad? Key advice from financial experts

Securing your child’s education abroad requires more than just setting aside savings—it demands a strategic and well-structured financial plan. Making plans for your child's education is crucial to any parent's financial planning.

Education inflation is higher than regular inflation, and with the expected depreciation of the INR, parents need to factor in at least a 10-15% annual cost increase when planning for their child’s education abroad. Experts suggest a disciplined, early-start approach to meet this growing expense without financial strain.

Financial advice from experts:

Rohit Beri, CEO and CIO at Arthalpha: Focus on starting early, reviewing annually, and diversifying investments to manage currency and market risks.

- Start early and review your plan annually

- Start with equity-heavy allocation and gradually move towards debt as you approach the milestone – remember, if you start early, the short-term dips in stock markets won’t matter. Being debt-heavy will mean either you will never reach the goal or savings have to be substantially larger

- Move a small portion of the investment corpus to foreign assets every year. This way, you will keep reducing the risk of large currency depreciation; moving small amounts every year also means that TCS won’t hurt as much.

Review your portfolio regularly to align with currency fluctuations and evolving tuition trends. Remember, the key is consistency, discipline, and seeking expert advice to ensure your financial goals are on track.

Mamta Shekhawat, Founder of Gradding.com: Start by budgeting for your child’s education, including all expenses—tuition, accommodation, travel, and more. Building funds over time helps parents achieve their goals without financial strain.

Krishan Mishra, CEO at FPSB India: Estimate the total cost of education, consider all expenses, and consult both higher education and financial planners for expert guidance. Use tax-efficient savings plans to maximize returns.

Recommended Mutual Funds for Education Planning

Pankaj Mathpal, MD & CEO at Optima Money Managers, listed these mutual funds to invest in for your child’s education abroad.

• ICICI Prudential Large & midcap fund
• Kotak Multicap fund
• Motilal Oswal Midcap Fund
• HDFC Focused Equity Fund
• Tata Small cap fund
  
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  Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.