Here’s how you can plan for your child’s education

Financial experts and surveys conducted across India report that inflation has severely impacted the education sector in India. The inflation of the education sector in India has risen to approximately 11% to 12%, which is twice the inflation rate. This startling trend poses a significant challenge for Indian parents who aspire to provide their children with a high-quality education. Systematic planning and wise investments can help students achieve their dreams despite rising education expenses. This article aims to guide Indian investors on how to plan for their child’s education using an education planning calculator.

How does a child education planning calculator work?

Education planning calculator by NIMF is a powerful tool that assist investors in estimating the future cost of their child’s education. These calculators consider various factors to provide a comprehensive plan for achieving a student’s education funding goals. Here are the essential fields that investors must fill in when using an education planning calculator:

  • Current Age (in years): The calculator requires the student’s age at the start of the education planning process.
  • Age of the student when they will require the funds: Investors must determine the age at which their child/children will need the funds for higher education. They must also have a clear timeline of their child’s education in mind.
  • Student’s current savings: Existing savings or investments that the investor has earmarked for their child’s education.
  • Current cost of education: Investors must research the current estimate of the desired education for their child. Calculating this figure can serve as the baseline for further calculations.

The education planning calculator leverages these inputs to project the future cost of a student’s education by considering the impact of inflation.

How can investors calculate their child’s education using an education planning calculator?

Planning for a child’s education involves taking several measures that require careful consideration and informed decision-making. Here is how investors can use an education planning calculator to plan their child’s future:

  • Investors must calculate their total savings:

Investors must begin by accounting for their current savings for their child’s education. Investors must know where they stand financially to determine how much more they need to save and invest.

  • Investors must research online to know the current value of their child’s education:

Investors must research the projected cost of education when their child reaches an advanced age to plan for their future. The internet provides valuable insights into the expected inflation rates and education costs, enabling investors to come up with an informed estimate.

  • Investors must learn about the inflation-adjusted price of their child’s education:

Investors should use the education planning calculator to factor in inflation rates. This step is crucial as it helps an investors understand the real cost of their child’s education in the future. Investors can receive an estimate of the future education expenses adjusted for inflation by inputting the student’s current age, age at which funds are required, current savings, and cost of education in the present year.

  • Investors must decide on a mode of investment and an investment horizon:

Based on the calculator’s output, an investor can strategize their investment approach. They can determine the investment avenues that they wish to explore like mutual funds, fixed deposits, or educational savings plans. Additionally, investors can establish the duration of their investment horizon by aligning it with their child’s age when they require the funds.

An education planning calculator can help parents and guardians looking to secure their child’s educational future by helping them plan better. Through diligent savings and smart investments, investors can ensure that their child receives the education they deserve.

You can plan your child’s education expenses by clicking here –

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