Planning for a child’s education is a journey. Not a sprint, not a gamble, but a step-by-step progression. One that needs discipline, patience, and clarity of direction. For many Indian parents, Systematic Investment Plans (SIPs) in mutual funds provide a flexible and easy way to build wealth over time.
But setting up a SIP isn’t enough. What matters more is how you grow it, adjust it, and eventually protect it. That’s where glide-path investing comes in, a thoughtful way of planning your SIPs based on your child’s age, your income, and your risk comfort.
Let’s explore what this really means and how you can use it to make your child’s education dreams a reality.
What Is Glide Path Investing?
Think of glide-path investing as having a structured roadmap to your child’s goal. It’s not just about putting money in every month; it’s about adjusting the direction of your investments based on how far or close you are to the goal.
In simple terms:
- In the early years: You focus more on growth by allocating a higher portion of your SIPs to equity mutual funds because you have time on your side to ride through market ups and downs.
- As the goal approaches: You shift that balance gradually towards debt mutual funds, which offer stability and lower risk, helping you protect what you’ve already built.
This gradual shift in asset allocation from equity to debt as the target year gets closer is the essence of a glide path. It’s not random. It’s not emotional. It’s strategic.
Why Not Just Stick to One Asset Mix?
Because markets don’t care when your child turns 18.
When your goal is fixed, like college starting in 2035, you need a plan that adapts before that date. If your investments are still heavily in equity a year before the fee deadline, a market correction could wipe out months or years of gains.
On the flip side, if you stay overly conservative too early, you may not build enough corpus to meet rising educational costs.
That’s the balance glide path investing helps you strike: Grow early. Protect later.
Example: A 10-Year Glide-Path SIP Plan
Let’s assume your child is 8 years old, and you have 10 years before college. Here’s a sample glide-path:
| Year | Monthly SIP | Annual Increase | Equity Allocation | Debt Allocation | Reason |
|---|---|---|---|---|---|
|
1–2 |
₹5,000
|
0%
|
60% |
40%
|
Time is on your side. Use equity. |
|
3–5 |
₹6,000–7,000 |
10–15% yearly
|
70%
|
30% |
Push growth while you can. |
|
6–7 |
₹8,000–9,000 |
10–15% yearly |
60% |
40% |
Begin tapering risk. |
|
8–9 |
₹10,000 |
Flat |
40% |
60% |
Priorities stability. |
|
10 |
₹10,000 |
Flat |
20% |
80% |
Shield final corpus. |
This path assumes you’re increasing your SIP amount over time (step-up SIP), which aligns with salary growth. You’re not investing more just to beat the market; you are investing smarter to stay aligned with the goal.
The Role of Step-Up SIPs
Your SIP shouldn’t remain frozen while your income grows. Increasing your monthly investment each year by even 10–15% can make a huge difference in the total corpus.
Here’s why step-up SIPs matter:
- They match your income growth.
- They compensate for inflation in education costs (which rise 8–10% annually).
- They reduce the burden of playing catch-up later.
Even starting with ₹3,000–₹5,000 monthly and stepping it up yearly creates a powerful compounding effect without straining your present.
How Equity Early and Debt Later Works
Let’s clear the confusion:
Yes, we begin with higher equity exposure, not because it’s risky, but because it gives growth. When the goal is far away, short-term volatility doesn’t hurt much. Over time, equity tends to smooth out and deliver stronger returns.
But as you near the goal, say 2–3 years before the target, the stakes change. Now, your job is to protect, not chase. So you start moving funds into low-risk debt instruments like liquid or ultra-short-term debt funds.
Think of it like this:
- Equity = Rocket fuel (use it when you are far from the goal)
- Debt = Parachute (use it when you are close to landing)
Simple Excel Tracker to Monitor Progress
To help you keep track, here’s a simple way to log your glide path journey:
| Years | SIP Amount | Step-Up (%) | Equity Portion | Debt Portion | Comments |
|---|---|---|---|---|---|
|
1 |
₹5,000 |
0% |
₹3,000 |
₹2,000 |
Starting point |
|
2 |
₹5,500 |
10% |
₹3,300
|
₹2,200
|
Keep steady |
|
5 |
₹7,000 |
10% |
₹4,900 |
₹2,100 |
Mid-point review |
|
8 |
₹10,000 |
0% |
₹4,000 |
₹6,000 |
De-risking starts |
|
10 |
₹10,000 |
0% |
₹2,000 |
₹8,000 |
Goal year |
You can download this ready-to-use google sheet template which auto-calculates the equity and debt amounts based on your SIP and allocation percentage.
A Story of Smart Parents
Ravi and Neeta from Jaipur started SIPs when their daughter turned 4. Their income didn’t allow more than ₹4,000 a month initially. But they increased it by 10% every year and adjusted the allocation every 2 years. By year 9, they had shifted 80% of their portfolio into low-risk funds.
Result? They paid the first-year engineering fee out of pocket, no loans, no withdrawals from emergency funds.
Mistakes to Avoid
- Being too safe too early: You won’t beat inflation with just debt funds.
- Sticking with high equity till the end: That’s riskier than it seems.
- Not increasing SIP amounts: Time is money, but so is momentum.
Final Thought: You’re Not Just Investing; You’re Enabling Dreams
Planning for your child’s future isn’t about complex charts or market predictions. It’s about direction. About keeping your effort steady and your eyes on the goal.
A glide path isn’t flashy. It’s not aggressive. It’s intentional. It’s the financial version of good parenting: quiet, adaptable, and long-term.
