Planning for Child' Education

Every parent is concern about their child's education and further, they always think about how it could be the best within their financial capacity. Before you make education planning, do consider the following expenses as well:

• Inflation effect: The inflation on education is 10% p.a. against the general inflation of 6% - 8% p.a. which we get in our other daily consumption & commodities. Education inflation would have a huge compounding impact on the overall future tuition fee of higher education. 

• Competition: Go back to 1960-1970 time, where mere graduation was enough to get a good job. During 1990-2000, post-graduation was required to give an extra weightage in job selection. Today, one notch above, specialized qualification or foreign education is asked apart from PG. This need to make provision for the extra funds.  

• Lifestyle cost: We try to provide a luxurious & better lifestyle for our children than what we had received in our childhood. Naturally, this will come with extra costs on account of branded clothes, costly mobiles, air-condition & other comforts, etc. to your child while studying. 

• Coaching cost: Tuition gets started from the primary classes and thereafter at senior school level whatever may be stream taken by the child, need to get professional coaching for 2-3 years to crack a competitive exam. Need funds for that as well.

• Other activity costs: A child needs to be all-rounder if not perfectionist, not necessary, but to know their niche, you have to get enrolled into 3 - 5 different activities/hobbies/courses and carry on with only 1 - 2 later for their lifetime. 

• Vehicle cost: Our previous generation used to go on a bicycle during a study which was upgraded to luna/scooter at our time. Now, child expectations are to have a stylish bike and/or premium car. 

Our efforts are to provide the best education to our children in all areas always. But these come with an extra premium cost which needs to be taken into account while planning for the child's future education.

The best year to plan is when a child is of zero years. Don't get me wrong. Even then you won't have ample time to plan & act, but at least you might get enough time to let your investment compound over 2 decades if you realize the opportunity cost.

Something in life never ever to be procrastinated - child education planning and your retirement planning are those.