Why you need to plan for children’s education!

Our children are growing up in an age of uncertainty. Many things that the previous generation took for granted can no longer be taken so. This is especially true when it comes to jobs and careers. Fast globalization, technology redundancy and intense competition, even in skilled domains, is the hard reality. Vast areas of the corporate sector are being downsized and many jobs in the market are being offered on a contractual or non permanent basis.  Fortunately, there is still a thriving market for highly skilled professionals or for entrepreneurship in new areas. A good education, especially advanced degrees are the keys to this.

Education, however is not cheap and its costs are rising fast everywhere in the world.  Yet it is the passport to the good life – high paying jobs, security and upward mobility. So it is natural that you  want to have the best for your children.

Let us understand the numbers here. An engineering degree, even at a modest college will cost at least Rs4 lakhs. This is only with regard to the fees.  Premium institutes charge much higher especially for <Master’s and Doctoral programmes. An MBA at  IIM can range from Rs11 lakhs to just under Rs20 lakhs, depending on the Institute.  The fee is only one aspect of it.

Inflation in the education sector is very high. According to National Sample Survey Office (NSSO), between 2008 and 2014, the average annual private expenditure for general education (primary level to post graduation and above) shot up by a staggering 175 percent while during the same period, the annual cost of professional and technical education increased by 96 percent.

With an average running inflation rate of 10%, a four-year engineering course that costs Rs 8 lakh today is likely to increase to Rs 17 lakh in another eight years’ time. By 2030, the same would cost more than Rs 30 lakh!

This is where a well though out financial plan becomes all important.  There are many ways you can go about this – either consult a personal financial advisor or benefit from online financial planning tools like – Geojit’s 100% digital financial planning platform.

Posted: September 2017