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A Comprehensive Guide to Planning for Your Child's Education

March 11, 2019


For a parent, nothing quite compares to the feeling of holding your newborn child for the first time. In that moment, you know that you'll do whatever it takes to keep your little bundle of joy safe and happy. This involves planning for their future, especially their education, which will determine the rest of their life.
Sadly, education inflation is climbing at an alarming speed. In fact, the average rate of education inflation over the last 10 years is 7%. If we assume that this rate remains steady, the fees of specialised courses could double in the next 10 years! Currently, the fees at IIT is Rs. 9.20 lakhs. It's projected to reach Rs. 18.10 lakhs in the next 10 years.

While these figures can seem slightly daunting, you don't need to worry. With some prudent financial planning, you can easily finance your child's education. Wondering how? Here's a handy guide that will show you.

  1. Start by Understanding Your Child's Goals

    As your child starts to grow, you'll be able to understand what they're passionate about and what they may have an aptitude for. By the time they reach the age of 10 or 12, they might have an idea of what they'd like to do with their lives. Think about whether the kind of course they may have to do is available in India, or if specialised courses are available abroad. Estimate what the cost of that course may be and how much time you have to save up. If your child is 8 or 9, you have another 8 years to save. On the other hand, if your child is already 13 or 14, you have just 4 or 5 years to get your finances in order.

  2. Factor in Inflation

    Since education inflation is increasing at a far higher rate than regular inflation, it's imperative that you consider this while mapping out your financial plan for your child's future. While the average rate of education inflation over the last 10 years is 7%, it's a good idea to consider the rate as roughly 8-10% or higher while calculating the amount you might have to shell out for your child's future education. This way, you'll err on the side of having excess finances, instead of being left with too little to fuel their dreams. We can understand the problems this could cause with an example.

    Currently, a good business school has a fee structure of Rs. 25 lakhs. If we assume that your child will attend this business school in 5 years, and the rate of inflation is 8%, you'll end up paying roughly Rs. 37 lakhs. However, if the rate of inflation goes up to 12%, you'll have to pay Rs. 44 lakhs in 5 years!

  3. Choose Your Financial Tool

    Now that you have a better understanding of the timeframe you're looking at and the kind of money you might require, it's time to pick the financial tool that will help you meet your goal. There are a number of investment avenues available to you, so it's important to make the right choice. HDFC Life's Click2Invest ULIP could help you with this. Apart from being an investment plan, it also provides you with life cover, so if anything were to happen to you, your child would have financial protection from the life cover that ULIPs provide. HDFC Life also has a number of Children's Plans, which have been created with the specific aim of helping you finance your child's future and provide them with everything they need.

    Now, all that's left to do is start your investment plan as soon as possible, so that you and your child can reap maximum benefits. If you're ready to secure your child's financial future and give them the wings they need to fly, click here.

Plan your child's future

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ARN: EC/06/2017/9792

Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Author Profile Written By:
Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.