Economic

The birth of a child is an occasion of extreme happiness for the family. However, it comes along with an additional responsibility for the parents, which is not just physical and mental, but also financial in nature. It is the wish of every parent to provide the best possible upbringing, which among other things would include quality education and financial security.

Most parents today want to start planning for their child's future as soon as the child is born. Financial planning for children entails the creation of a corpus for expected future expenses such as higher education and marriage, and also ensuring that there is an adequate security cover during their growing years.

The first important step in planning for a child's future is to determine the amount of expenditure which would have to be incurred in future on different goals such as education, marriage etc. Since these goals may be in the distant future, you must consider the impact of inflation. For example, if the cost of higher education is Rs 15 lakhs today, assuming an inflation of five percent, this cost will rise to Rs 31 lakhs after 15 years.