5 Mistakes in Child Education Planning

Creating a child education plan in India is a long-term commitment, and I've seen even small, well-intentioned mistakes have a big impact on the final outcome. Let's walk through five of the most common errors I see parents make, so you can steer clear of them.

1. The "I'll Start Next Year" Trap (Procrastination)

This is the most common mistake. It's easy to think, "I'll start when I get a raise." But every year you delay, you lose out on the incredible power of compounding. This means you have to invest significantly more later on just to catch up.

2. Using the Education Fund as a Piggy Bank

Dipping into your child's education fund for other needs—a home renovation, a vacation, a new car—is a critical error. It compromises the most important, non-negotiable goal. My advice is to create separate, dedicated investment accounts for each major financial goal. Keep the education fund sacred.

3. Playing It "Too Safe" with Investments

Many parents rely solely on traditional insurance policies or FDs. The problem? Their returns often fail to beat education inflation, which means your hard-earned money is actually losing purchasing power over time. For a long-term goal (10+ years), you must invest in growth assets like equity mutual funds to create the wealth required.

4. Forgetting About Inflation

Planning for today's cost of education is a recipe for disaster. An engineering degree that costs ₹10 lakh today will not cost the same in 15 years. You must always factor in an education inflation rate of at least 8-10% when calculating your target amount.

5. Not Having a Backup Plan (Insurance)

What if something happens to you? A great investment plan is useless without a safety net. An unforeseen event can derail the entire plan. You must ensure you have adequate term life insurance to protect your family's financial future and your child's goals, no matter what.

Avoiding these pitfalls is the key to successful planning. A professional review can help you ensure your plan is robust, protected, and error-free.