CHILD EDUCATION
Summary
- Plan for Child Education as early as possible
- Each child is unique, so plan for their future based on their interest
- Consider inflation while planning for child education need
- Plan for corpus considering investments across different avenues like – Mutual Fund (Systematic Investment Plan), Gold, Child Plan, Debt Instruments
- Diversification shall help to reduce the risk related to investments
- Consider investing in child plan with a long term horizon, ideally 10 years plus
- If planning of child education abroad consider the same with a higher amount which also includes travel, accommodation and other expenses
Fact O Meter
- Average school education cost is Rs. 60 K p.a.
- Average school fee has risen from Rs. 25 K in 2000 to Rs. 70 K – 1 Lac in 2018
| Impact of Inflation on Education Cost | |||||
|---|---|---|---|---|---|
| Need | Current Cost | After 5 Yrs | After 10 Yrs | After 15 Yrs | After 20 Yrs |
| MBA / Post Graduation Courses | 500,000 | 717,815 | 1,030,516 | 1,479,439 | 2,123,926 |
| Education Abroad | 2,500,000 | 3,589,073 | 51,52,579 | 73,97,193 | 10,619,628 |
| Medical Course | 3,000,000 | 4,306,888 | 6,183,095 | 8,876,632 | 12,743,553 |
Tips
- Tuition fee can be claimed as tax benefit u/s 80 C – For maximum two kids
- Premium for child plan cam be claimed u/s 80 C
- Include your children name as nominee/appointee based on the investments done in their name
- Prepare a “WILL” with adequate allocation for your children future goals
- Start investing early & allocate percentage of income towards child’s future goals
- Invest across different asset classes in order to diversify & reduce the risk
- Invest in a child plan in order to secure a part of child education need
