Picture a parent in Pune who paid ₹40,000 for a Class 1 admission a few years back. This year, the same school quotes far more. The teaching hasn’t changed. Only the price has. That’s inflation at work, and it matters if you’re weighing up child plans for your little one. Let’s look at why.
Why Education Gets Pricier Every Year
India’s retail inflation keeps shifting. For planning, try 4 to 6 per cent, but treat it as a rough guess, not a fixed or current rate. Education tends to run ahead of that. Many estimates suggest 8 to 10 per cent a year, though it depends on the city, the board and the college.
Doesn’t sound like much? Try this. A degree costing ₹20 lakh today would cost roughly ₹93 lakh in 20 years if fees grow at 8 per cent. That’s not a typo.
And fees are only one slice. Hostel bills, books, laptops, tuition classes, entrance coaching, and travel pile up fast. Planning for a university abroad? Then the rupee’s movement against the dollar or pound becomes your problem too.
Where Most Parents Go Wrong
Most of us plan with today’s numbers. It’s natural. It’s also the mistake.
Picture this. Your savings grow 6 per cent a year, but education fees rise 8. The balance looks healthier every month, so you relax. Meanwhile, the goal keeps sliding away, and each year the same money covers a little less of the course you planned for.
So flip it around. Figure out what that course could cost by the time your child turns 18. Then ask yourself one thing: what do I need to put aside each month to get there?
Three Things to Check Before You Commit
When you compare child plans, don’t get swayed by brochure benefits alone. Check these first:
- Inflation: Use a realistic rate for future costs. A hopeful guess only makes the gap bigger later.
- Education expenses: Decide what you’re aiming for. An Indian undergraduate degree, a master’s, and a foreign university sit at very different price points.
- Investment duration: Begin at birth, and you get around 18 years of compounding. Begin at age 10, and you get eight.
Look at these together, and the real question appears. How much will my child need, and by when?
Small Habits That Make a Big Difference
Start now. Even Rs 2,000 a month counts. Why? Because time does most of the work. Your gains begin earning gains of their own, and it needs years to grow. Wait too long, and you give a lot of it up. Nobody can tell you what you’ll end up with, though. Markets swing, and fees quietly take their share.
Raise your contribution each year as your salary grows. Even a small bump helps. Match risk to time as well. With 15 years to go, you can consider more growth-oriented options. With three years left, play it safe.
Check in once a year, because fees and family plans both change. Not sure where to begin? A SEBI-registered adviser can help you sort it out.
Conclusion: Start Small, but Start
Education costs won’t wait for your child to grow up. You can’t control the rate, but you can control how early you begin and how honestly you estimate. Whichever of the child plans you choose, test it against tomorrow’s fees, not today’s. Start small if you must. Just start.
