Dr. Sanjay Tolani is the CEO of a Single-Family Office and sits on the board of a Multi-Family Office Advisory firm named Goodwill World which serves clients in over 53 countries on Estate Planning Strategies. He is also on the board of many Venture Capitalist Funds which invest in Technology, Education, Financial Services, Trading & Food & Beverage Industries. He has completed 2 Under-Graduate, 3 Post-Graduate and 1 Doctorate in the field of Economics, International Law, Finance, Banking, Insurance, Investments & Risk Management. Professionally, he is a member of the Million Dollar Round Table- The Premier Association of Financial Professionals where he became the Youngest Member at the age of 19. He also holds the record of being the youngest Managing Director of a Financial Advisory in the Middle East. Dr. Sanjay is also the author of 11 Books, which have covered topics on Personal Financial Planning, Investments, Marketing, Branding, and many are now regarded as the “textbook” for financial professionals.
Education is probably the biggest and most continuous as well as long term expense of parenthood, and it has become frighteningly expensive these days. A lot of children look forward to a good college education, and a number of them even aspire to study abroad in their later years. While they know that it costs them large amounts of money, it is essentially the parents who shoulder this expense or help them with procuring adequate debt. As a parent, it is sensible and now becoming critical to plan, save, and invest smartly and early in order to give your child a good education without burning a hole in your pocket or building their lives on a foundation of debt and compromising on your needs or wants in the process. Of course, one can save the money and leave it in their bank account; but do understand that there are many financial practices and products in the market that can help this money grow substantially over time. As an experienced financial advisor who has driven the growth and profitability of a variety of individual portfolios as well as family businesses, I strongly recommend that saving for your child’s education and educating them about finances are crucial and the earlier you start, the better it gets.
- Practice bringing your child to the bank and allow them to see how and where money functions:
Children may not understand the functioning of a bank right away, but a few trips will make things easier for them and help them understand how money functions. Start by making them run small errands in the bank like standing in the queue for a cheque deposit or depositing the cheque correctly in the right dropbox or withdrawing and depositing money from the ATM machine.
- Let your child see how you deposit money into the bank to save for their college education:
Financial education should really begin at a young age these days. It is very important to help your child understand the value of money so that when they start spending it, they do it sensibly. Money saved is also money earned and inculcating a habit to save at an early age can do wonders for your child’s financial health growing up. Give them the amount of money you would like to save to deposit in the bank with their own hands so they feel responsible for it.
- Try to avoid taking additional loans:
Interest rates can really eat into a person’s savings over time, especially if they have multiple loans to pay off. To avoid taking big loans in the future, one needs to start saving early. This means that you should ideally start a saving investment today. This will be highly beneficial for your finances as well as your child’s education needs in the future by minimizing the financial burden and cushioning any sudden impact.
- Always invest early and at the same time protect your child:
Endowment plans for your child’s education can be wonderful if considered early as they provide dual benefits of insurance and investment. An endowment policy not just covers the life of the insured, but also helps the policyholder save regularly over a long period of time so that they can get a lump sum amount on maturity. Investing early helps you save more for your child for when they are old enough to pursue their higher studies.
- Always have your child protected with insurance:
Life and health insurance proceeds can serve as a source of support, help pay off debts, take away the burden of big medical expenses, and provide for the education and even daily living expenses of your family and dependents. While one would never want their child to come in harm’s way, but just in case an unforeseen circumstance does occur, these tools can seriously help alleviate the financial part of the problem at that point in time.
At the end of the day, whenever a child grows up and goes to college, someone has to pay for their education. Be it the pressure of an education loan that they may have taken on in their twenties and thirties or the increased financial responsibility and burden on you as a parent in your forties and fifties, this money has to find some account. Saving early for your child’s education can help the expense whenever it needs to be incurred, be taken care of much more comfortably, abundantly and stress-free without depleting any other funds that you may have put aside for other financial commitments.