Hi investors, 

I hope you are doing well. 

You see change is the only constant, our dreams have changed too.

Millennials (born 1981-1996) wanted to work in tech. However, Gen Z (born 1996-2012) wants to work in the Media and entertainment industry and Gen Alpha (2013 onwards) will have different priorities.

So, if your child is falls in one of these categories then to fund your child’s dream you need to be prepared 

The Challenge of Funding Education

The cost of education has been rising steadily. For instance the average cost of an Engineering course at a leading institute is 2.5 lakhs for a year taking the total course fee to 10 lakhs. Now taking the account of education inflation (assuming 15%) it will jump to around 73 lakhs. So it's crucial for parents to plan ahead to ensure they can support their child's aspirations whatever they may be. From tuition fees to accommodation and other expenses the financial burden can be significant. One effective way to tackle this challenge is through mutual funds specifically Equity Linked Savings Schemes (ELSS).

It can be a powerful tool in meeting your child's education expenses. ELSS are tax-saving mutual funds that not only help you save for your child's education but also provide attractive tax benefits.

Let's take a look at how you can leverage ELSS to plan for your child's education:

Start Early and Invest Regularly

Time is on your side when it comes to investing for your child's education. The earlier you start the more time your investments have to grow through the power of compounding. By investing a modest amount each month through a Systematic Investment Plan (SIP) in ELSS you can build a substantial corpus over the years.

For example a monthly SIP of just ₹30,000 in top-performing ELSS funds can turn into over ₹1 crore in 10 years, assuming an average annual return of 12%. This corpus can go a long way in funding your child's higher education expenses.

Leverage Tax Savings

ELSS funds not only help you save for your child's education but also offer tax benefits under Section 80C of the Income Tax Act. Investments up to ₹1.5 lakh per year in ELSS can be claimed as a deduction from your taxable income effectively reducing your tax liability.

This dual benefit of wealth creation and tax savings makes ELSS a compelling choice for your child's education planning.

Top Performing ELSS Funds

When it comes to ELSS funds it's important to choose wisely. Here are some of the top-performing ELSS funds that have consistently delivered strong returns over the long term:

1. Axis Long Term Equity Fund

2. Mirae Asset Great Consumer Fund

3. Invesco India Growth Fund

4. Quant Active Fund

These funds have demonstrated the ability to navigate market cycles and generate consistent returns making them suitable for your child's education planning.

Conclusion

Funding your child's education can be a daunting task but with the right financial planning and the use of ELSS mutual funds you can ensure that your child's dreams are not limited by financial constraints.

Start early invest regularly and leverage the tax benefits of ELSS to build a robust corpus for your child's future. By doing so, you can provide your child with the opportunity to pursue their passions and reach their full potential.