5 Mistakes in Child Education Planning

Creating a child education plan in India is a long-term commitment, and even small mistakes can have a big impact on your final corpus. Here are five of the most common errors we see parents make, and how you can steer clear of them.

1. Delaying the Start (Procrastination)

The Mistake: Thinking "I'll start next year when I get a raise." Every year of delay means you lose out on the power of compounding and have to invest significantly more later to catch up.

The Solution: Start today, even if it's a small amount. Building the habit is what matters most.

2. Mixing Education with Other Goals

The Mistake: Dipping into your child's education fund for other needs like a home renovation or a vacation. This compromises the goal.

The Solution: Create separate, dedicated investment accounts for each major financial goal. Keep the education fund sacred.

3. Choosing Low-Yield, "Safe" Products

The Mistake: Relying solely on traditional insurance policies or FDs. Their returns often fail to beat education inflation, meaning your money is actually losing value over time.

The Solution: For long-term goals (10+ years), you must invest in growth assets like equity mutual funds to create wealth.

4. Underestimating Inflation

The Mistake: Planning for the current cost of education. An engineering degree that costs ₹10 lakh today will not cost the same in 15 years.

The Solution: Always factor in an education inflation rate of 8-10% when calculating your target corpus.

5. Not Having a Backup Plan (Insurance)

The Mistake: Having a great investment plan but no life or health insurance. An unforeseen event can derail the entire plan.

The Solution: Ensure you have adequate term life insurance and health insurance to protect your family's financial future and your child's goals.

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