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Child Education Planning in India: How Much Should You Save Today?

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School and college fees in India have risen sharply in recent years — from steady increases in private school fees to rising higher-education costs. Surveys and media reports show many parents now feel squeezed by fee hikes, especially in metro cities. Planning early protects your child’s future and your family’s finances.

What the Data Says (2024 Snapshot)

  • India’s retail inflation in 2024 hovered in the 4–6% range (CPI), but education costs have risen much faster.
  • Private school and higher-education fees vary widely: quality private schools in big cities charge between ₹80,000 to ₹3,00,000+ per year for higher grades, while college costs range from ₹50,000 per year (regular colleges) to ₹5–15 lakh total for premier private engineering/medical courses.

How to Estimate How Much You’ll Need

  • Decide the current cost you want to target (school + college).
  • Apply an education inflation rate (use 7–10% for realistic planning).
  • Grow the current cost over the number of years until the expense (e.g., 18 years for college).
  • Choose an expected investment return (equity SIPs often assumed at 10–12%).
  • Calculate your required SIP contribution.

A Realistic Example of Future Costs

Scenario: Child is newborn today. You aim to fund a 4-year undergraduate degree starting when the child is 18.

  • Current estimated total cost: ₹8,00,000 (₹2 lakh per year × 4).
  • Education inflation assumption: 8% per year.
  • Years to grow: 18.

Future cost in 18 years = ₹8,00,000 × (1 + 0.08)^18 ≈ ₹32 lakh.

How much SIP to reach ₹32 lakh in 18 years?

  • If SIP earns 10% p.a., monthly SIP ≈ ₹5,323.
  • If SIP earns 12% p.a., monthly SIP ≈ ₹4,218.

Delaying the start means your monthly SIP requirement will rise steeply.

Practical Steps for Parents

  • Start with a realistic baseline — decide the type of college you’re aiming for.
  • Use SIPs for growth — equity SIPs are simple, tax-efficient, and long-term inflation beaters.
  • Add child education plans — to secure the goal in case of an unfortunate event.
  • Keep funds separate — goal-based investing avoids confusion and premature withdrawals.
  • Account for living costs — beyond tuition, include hostel, travel, gadgets, and coaching.
  • Use tax benefits — PPF and child plans offer tax deductions; SIPs in ELSS can also help.

Why SIP + Child Education Plan Is the Winning Combo

  • SIP ensures disciplined investing and long-term compounding — the best way to beat education inflation.
  • Child education plans provide financial protection, ensuring your child’s dreams are safe even in your absence.

Together, they provide both growth + security.

Example at a Glance

  • Current 4-year cost: ₹8,00,000
  • Education inflation: 8%
  • Future cost in 18 years: ₹32 lakh
  • SIP needed: ₹5,323/month (10% return) or ₹4,218/month (12% return)

Ready to Secure Your Child’s Future?

We help parents in three steps:

  • Estimate your child’s realistic future cost.
  • Build a goal-based SIP plan with annual reviews.
  • Add the right child education plan for protection and tax efficiency.
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