Assess the cost:

First assess the future cost of education and marriage expenses. Today education expense is 7% higher compared with a year ago, according to data from the Consumer Price index (CPI). If this were to continue, the cost of a graduate programme of say Rs 5 lakh today will more than double to Rs 10.5 lakh in 11 years. Hence, keep the future value in mind. For wedding, take in to account a 8-9% price rise per year.

Time horizon:

Secondly, find out when you need to reach your goals. That will decide the nature of your investments. If your child's higher education is say 10 years away, you can hold a good proportion in equities - an asset class known to beat inflation over the long term. But if you need the money in say 2-3 years, then you will have to settle for fixed deposits or short-term debt funds.

Start early:

Starting early allows you to take exposure to high-yielding asset classes besides using the power of compounding in your favour. Options such as systematic investment plans (SIPs) offered by mutual funds allow you to make small investments for the long term in a disciplined way. But you should increase this investment at least once a year, as your income grows.

Separate portfolios:

Ensure you have separate investments for different goals. This is important because an investment you choose for a goal that is 10 years away may not be suitable for another goal that is just three years away.

Building a portfolio:

Should you have deposits, PPF, mutual funds, child plans or gold? Ideally you should have a combination of these. But if you can take some risk and your child's requirement is a while away, then high yielding asset classes like equity should account at least 50% of your portfolio. Gold can find a place in a marriage portfolio with 5-15% allocation. The rest can be in a combination of debt products such as PPF, deposits, long-term tax-saving bonds and NSC.