Planning for your child’s higher education abroad? Here’s how to save as per your risk appetite
Every year more and more Indian students are going abroad for higher education. New courses, short certificate programs and several options for colleges are responsible for high influx of Indian students in foreign universities. Foreign education is becoming expensive and it’s important to start planning for it well in advance.

We bring you few tips to build a strong child plan for saving for an education abroad:

1. Calculate the probable costs
   Calculating the overall costs and planning for it is essential. When you start an education fund for your child, calculate the costs and decide on a goal amount. Don’t forget to consider the inflation as it will affect your goal. Increase or decrease the amount you save, depending on the probable effect of inflation on your returns.
   
   
2. Start early
   Studying in a foreign institute will incur considerable costs. To avoid taking massive education loans later, it’s important to start early. Start pitching for your child’s education plan to save money for everything from tuition fees, travel and visa expenses to living expenses abroad. Starting early will not only let you save in small amounts but will also help you to earn lucrative returns with long-term savings instruments.
   
   
3. Invest wisely
   Instead of parking all your money in savings account split it into savings and investment instruments. Check your risk appetite and the rate of returns before investing your money in various instruments. Whether you pitch in for monthly SIPs or invest in high risk equity funds, invest wisely keeping in mind the end goal.
   
   
4. Evaluate risk appetite
   Your risk appetite will be different at different stages of your financial plan. When you are nearing your goal, shift your portfolio to low-risk investment and savings instruments. However, you can consider moderate to high risk instruments in the beginning of your financial journey.
   

Here are a few instruments we recommend based on your risk appetite

-   For conservative investor
Conservative investors have the least appetite for risk. PPF and bank deposits are the best options for a conservative investor. Low risk instruments will give you steady and moderate returns. If you are apprehensive about investing all your money in high risk instruments, you can always have a mixture of high and low risk instruments and funds.

 -   For balanced investor
Debt and equity investments are the best options for the balanced investor who prefers to earn good returns with a moderate risk. To balance the risk, start with equity investments in the initial years and when you are nearing your goals shift to debt investments in the later years. This will give you an opportunity to earn good returns in the beginning with equity funds and avoid any risk of losing money with low risk debt funds. 

 -   For aggressive investor
Aggressive investors with a high-risk appetite can go for high-risk mutual funds. These mutual funds are directed towards capital gains from high growth stocks. These stocks have multiple growth phases but are also incredibly sensitive to market conditions. They will earn good returns but will pose a higher risk. Those of you who want to start with their savings much later and have just 2-3 years left to save up for your child’s education plan must not invest in high-risk instruments and funds.

 You will always want to provide the best education to your child as that lays the basis for the life he/she will lead ahead. Start planning early and devise a strategic financial plan to let your child pursue the career of his/her dreams.

Disclaimer: 
The aforesaid article presents the view or an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ before making any decision.

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