We associate Inflation with prices going up. We generally perceive it pushes up the prices of fruits, vegetables & perhaps fuel costs as well.

Unfortunately, Education expenses in India have been rising at a brisk pace at a rate much above the average inflation rate but mostly there is silence around this.

Child Education

Between 2012 and 2020, while food inflation rose by 9.62 percent, education costs climbed by 10 percent.

Despite the hard-hitting pandemic, in 2021, Indian Institute of Technology (IIT) — all units in the country — doubled their fees by Rs 90,000 to Rs 2 lakh for all undergraduate courses. For schools’ average increase in annual fees around 10% is not uncommon either.

Add to it many hidden charges, private coaching classes fees, rent for hostel or PG accommodation, books, study materials and what not!

For a financially unprepared family, this could be devastating.

Many families who feel they are prepared continue to blindly put away money into “Child Plans” that are essentially Life Insurance policies providing poor returns. Some are clueless about the correct way to save for children’s education & end up investing in Fixed Deposits or Recurring Deposits that do not even outpace inflation!

What’s the “right way” to save for your child’s education?

Get The Math Right

Define clear goals keeping in mind target years and amounts. Our platform gives you flexibility to calibrate correct inflation rate for your chosen stream.

Sooner The Better

The best time to start is from the day you are blessed with the little one. Albert Einstein rightly said that compounding is the eighth wonder of the world. By starting early, you give the required time for your corpus to compound and grow.

Don’t Hold Back

You’ve got long years ahead of you. Go for high return investments like SIPs in equity or solution-oriented funds. Stay away from FD’s, Friends!

Insurance is not an Investment

You need insurance to protect your loved ones and a normal Term Plan takes care of it. Health Insurance provides you necessary shield for any medical emergency. Don’t get sold into opaque insurance products smartly sold as “Children Plan”!

Child education planning; Ponder over these points

Cost Matters

Research reports estimate that education expenses could impact lifetime savings of households by 15-45%

Liability is not a Great Idea

Saving for retirement and being debt free will lead you to a Happy Rich life. Paying EMI’s or giving your child a debt-ridden start should best be avoided.

SIPs are Good EMI’s

Equity markets in India have a proven track record of providing returns that handsomely outpace inflation in the long run but are volatile in nature. Mutual Fund SIPs provide you cost averaging & the discipline allows you to gradually grow your investments.

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