Price of Education
In the recent years a plethora of activities related to child development has led to sky rocketing costs of education. Talk to any parent and their foremost priority is educating their kids by giving them the best option available in the country. There does not seem to be a limit or budget when it comes to child education (the only other category that enjoys the same treatment is healthcare). No wonder education is now a very successful & lucrative business. Let us look at some of the child related expenses that form the education kitty of parents.
- School fees
- Tuition fees (private tutions)
- School bus fees
- Accessories - School uniform, bag, lunch bag, Shoes
- Gadgets - Desktop, laptop, Printer & stationery
Not to mention the special coaching and developmental classes outside of school, some of which include but are not limited to:
- IIT Coaching
- Cricket Coaching
- Tennis
- Badminton
- Swimming
- Learn a sport
- Martial arts
- Dance/Music/Instrumental
- ABACUS
- Computer skills
- Foreign language skills
And summer camps that offers new skills such as painting, pottery, photography, sailing etc..
Whatz the bill?
The average bill (including but not limited to categories mentioned above) for a child in class 1-8 comes to Rs.50k-Rs.80k p.a while for someone in class 9-12, the average bill works out to Rs.1-2Lacs p.a. An aspiring parent might end up spending a total of Rs.6-16Lacs before the child enters college. As for non-merit admissions to engineering degree programs add a capitation fee of Rs.5-10Lacs and for medical degrees add Rs.50-80Lacs - this does not include course fees and living expenses. So, if you look at the overall cost, the education bill for one child could be anywhere between Rs.20Lacs to a crore. Apart from this, some families aspire to send their children overseas for higher education which could cost US$200k-300k depending on the location/university (not to mention the external effects of education inflation & Forex depreciation to overall cost).
Importance of Planning
As you could see all this requires careful planning of finances for years way ahead of the university admission. As children's education forms a very important goal of every parent, it helps to plan on the accumulation, withdrawal and disbursement of funds in a systematic manner over long term. Consulting a financial planner could be beneficial in choosing the right investment vehicle that provides the required rate of return to fulfill the education goals of your children.
Whatz the bill?
The average bill (including but not limited to categories mentioned above) for a child in class 1-8 comes to Rs.50k-Rs.80k p.a while for someone in class 9-12, the average bill works out to Rs.1-2Lacs p.a. An aspiring parent might end up spending a total of Rs.6-16Lacs before the child enters college. As for non-merit admissions to engineering degree programs add a capitation fee of Rs.5-10Lacs and for medical degrees add Rs.50-80Lacs - this does not include course fees and living expenses. So, if you look at the overall cost, the education bill for one child could be anywhere between Rs.20Lacs to a crore. Apart from this, some families aspire to send their children overseas for higher education which could cost US$200k-300k depending on the location/university (not to mention the external effects of education inflation & Forex depreciation to overall cost).
Importance of Planning
As you could see all this requires careful planning of finances for years way ahead of the university admission. As children's education forms a very important goal of every parent, it helps to plan on the accumulation, withdrawal and disbursement of funds in a systematic manner over long term. Consulting a financial planner could be beneficial in choosing the right investment vehicle that provides the required rate of return to fulfill the education goals of your children.
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