Wishing all the Father – The hero for their Kid a Happy Father’s Day.
Off lately I have been interacting with many clients who are fathers. The common thing I observe in the top of their priority list is their kids education. Undoubtedly as a parent it should be one of your top priority goal but should it be the only priority is my question!
These Bollywood movies in 80’s and 90’s have shown the exaggerated version of parents where they sacrifice food, wishes for their kids. Let me be very honest the feelings have not changed much even today. Something similar I observed with my clients finances. Supposing if there is a surplus of 10k p.m then all of the funds are majorly allocated towards their kids education or marriage by not even thinking once about their own goals or own wish or most importantly retirement.
Now you would ask me whats wrong in that, after all who are they earning it for? There is nothing wrong but this emotional behaviour is the reason why most of the parents gets mis-sold by the financial products. As kids education is in top of their mind, any financial product with an appealing forecast is been sold and we as emotional parents gets trapped.
As I said before, kids education should definitely be the priority but only subject to 20-25% of their education cost. Things are changing so rapidly that predicting right from now what my kid would want to be 10-15yrs down the line is difficult. It can be possible whatever saving is been accumulated for kids education falls short in spite of sacrificing personal goals or maybe it’s too much in surplus if a child opts for a different career plan than the one you thought of. It turns out that is not so costly.But in both cases, personal goals are going to be the victim.
If you are inquisitive kind of reader you might think why only 20-25% of the education cost was mentioned? I will tell you why, so that balance amount can be taken as education loan.
I am sure now many of them would not like my suggestion in fact many fathers who are also my clients don’t like at first when I mention about education loan to be taken by their kids, because they feel their kids should not be burdened when they can afford it.
It is true you can afford it but at what cost? Sacrificing your personal goals or by sacrificing a dignified retired life? Education loan is not only helping them but also their children to let them stay focused and serious right from the beginning of their career. We want our kids to grow up and be an independent kid who takes his/her decision for their bright future so start with making them understand that it is responsibility and not burden. Above all the most important thing I always keep saying “There is a provision of Education Loan but there is nothing called as Retirement Loan.”
Be practical when it comes to planning your finances because after all its all about the choices we make reciprocates in long run as results.
Happy father’s Day!