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As a responsible parent, children’s education would top your list of priorities. The tuition fee is rising steeply. The rate of increase in the school/college fee is comprehensively beating the inflation rate by a considerable margin. If such is the case, then it’s only wise to start planning by investing in suitable instruments. Your children are dependent on you. You should not be in a situation where you are not able to cover the educational expenses of your children.
Parking your funds in a regular savings bank account will not help your cause as inflation would gulp your returns. The amount of Rs 10 lakh might now be enough to pursue an engineering degree from a reputed institution. Fifteen years down the line, Rs 10 lakh might not be enough to pursue even the higher secondary school education. Considering that, it makes sense to start planning your children’s education as soon as they are born or at the earliest.
The professional courses are costly. Pursuing a full-time degree from the premier government institutes such as IITs, NITs, and IIMs would cost at least a lakh and a half per annum. On top of it comes the hostel and miscellaneous fees which swell up the annual fee to over two and a half lakh a year. Education is the greatest wealth that you give to your children.
If you are planning to send your children abroad for their higher education, then you need to start planning for it at the earliest. A master’s degree in developed countries such as the USA, UK, Australia, and Canada would cost more than 40 lakh and raising that amount in a year or two is extremely difficult. Hence, planning early is critical in this case. You need to start planning for your children’s higher education as early as when they are in their higher primary school.
There are various financial instruments that allow you to plan your children’s education. Child insurance policies, money-back policies, children’s mutual funds, fixed deposits, and so on are some of the various options available. You can choose as per your requirement and risk profile.
How much to invest depends on the courses your children are interested in, and it also depends on the college/university in which they would study. There are various courses available these days. Ask your children for their interests, and you can invest accordingly. Children’s education is one of the largest cash outflows that you can have as a parent and it is inevitable. It requires long-term planning and you must be prepared to tackle the expenses that you would encounter when children complete their secondary school education.