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Child Education & Tax Planning

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How to Plan for Your Child's Education Expenses?

Being a parent, you must be concerned about whether you can meet your child’s education expenses. It is better to start thinking about the financial requirements from an early stage.
The longer time you have, the more comfortably you can move forward towards your goal. However, you should know the steps you need to follow to develop a proper financial planning for child education.
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How to Plan Higher Education for Your Child?

Following are some of the steps you will need to follow to make a reliable financial plan for your child’s education:

Measure the Time Horizon

At this first stage of educational planning for the child, you need to measure how much time you have on your hand to save and grow the required fund. For this, you simply need to deduct the age when your child gets admission for higher studies from their present age.

Estimate the Cost of Education for Your Child

At this stage, you will have to calculate the approximate cost of education for higher studies. You may consider the average cost of education at present. After knowing the rate, you will have to take into account the impact of inflation as well. This will help you ensure that your financial planning for child education does not get hampered due to a shortage of funds.

Make Investment Strategies

After knowing the amount; you will need to develop strategies for investment and savings. You will have to make a budget to save a certain portion of your monthly income towards the fund made according to your plan for child education. By regular and calculated habit of investing, you will be able to raise the required fund in due time. It will be much more advantageous for you if you start early. It is never too late to start. However, by starting early, you will gain a greater advantage of compounding.

Get Life Insurance Coverage

While you are making a financial plan for your child’s education, you should also get the coverage of a life insurance policy. It will help you safeguard your family financially. Furthermore, your family members will not have to touch funds earmarked for your child’s education to meet the financial crisis.

How Much Amount Need to Be Saved for Your Child's Education?

In the previous section, you learned how much your child might need to complete their education. To summarise, you first need to research the average cost of the educational fees of the courses they will pursue. Then according to the time horizon and ongoing inflation rate, you need to estimate future educational expenses.
Now that you have the projected expenses you will need to fulfil your plan for child education, you can estimate how much you have to save regularly to build that amount. For this, you will need to follow the steps mentioned below:
  • Step 1: Decide your investment instrument
  • Step 2: Know the interest you will earn
  • Step 3: Use an online investment calculator that will help you estimate the regular amount you need to allocate towards your fund to reach your target on time
After these steps, the calculator will display a sum that you will have to keep aside.

Sound financial planning for child education can significantly help parents ensure they can easily arrange the required fund. In fact, it is much better if they realise the need to make this plan early. It will help them comfortably build the projected fund for their child's education.
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Tax Planning & Advisory

As a business owner, tax planning services are an essential component of ensuring that your business remains financially healthy and profitable. At Sahyadri Capital, we offer a comprehensive range of tax planning services tailored to meet the unique needs and objectives of your business. Our team of seasoned tax professionals possesses an in-depth understanding of the complex tax regulations that govern businesses, and is well-equipped to assist you in navigating these intricacies with ease and accuracy. Whether you’re looking to reduce your tax liabilities, optimize your business structure, or plan for future growth, we have the expertise and experience necessary to help you achieve your goals.
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