Educational Purpose Only: This guide demonstrates how to use our calculators for financial planning scenarios. We are not financial advisors. All examples are illustrative. Please consult a certified financial planner before making investment decisions.
🎓 Children Education Planning: Start Early, Stress Less
Education costs are rising at 9% annually. A degree that costs ₹8 lakhs today will cost ₹20+ lakhs in 10 years. Here's how to plan systematically and avoid last-minute stress.
Why Education Planning is Critical
- High Inflation: Education costs grow 9-10% annually (faster than general inflation)
- Non-negotiable Goal: Can't delay or compromise on quality education
- Large Corpus Needed: ₹15-70 lakhs depending on India/abroad, UG/PG
- Time Advantage: Starting when child is 5 vs 15 cuts monthly SIP by 60%
- Stress-Free Future: No scrambling for education loans at high interest
Step 1: Define Your Education Goal
Use the Children Education Planner to select from 4 goals:
| Goal | Current Cost | Age Target | Typical Duration |
|---|---|---|---|
| 🇮🇳 UG in India | ₹8 lakhs | 18 years | 4 years (engineering/medicine) |
| 🌍 UG Abroad | ₹50 lakhs | 18 years | 3-4 years |
| 🇮🇳 PG in India | ₹15 lakhs | 22 years | 2 years (MBA/MS) |
| 🌍 PG Abroad | ₹70 lakhs | 22 years | 1-2 years (MS/MBA) |
Step 2: Calculate Future Cost (With 9% Education Inflation)
Example: Child is 5 years old, planning UG in India at 18
- Current Cost: ₹8 lakhs
- Years to Goal: 13 years (18 - 5)
- Future Cost: ₹8L × (1.09)^13 = ₹24.6 lakhs
The calculator does this automatically—just enter child's age and select the goal.
Step 3: Calculate Required Monthly SIP
Scenario: Build ₹24.6 lakhs in 13 years
- Expected Return: 11% (equity mutual funds)
- Already Saved: ₹2 lakhs (existing investments)
- Future Value of Savings: ₹2L × (1.11)^13 = ₹7.8 lakhs
- Gap to Fill: ₹24.6L - ₹7.8L = ₹16.8 lakhs
- Required Monthly SIP: ₹5,100
Use Children Education Planner to calculate your exact SIP
Step 4: Start Early to Reduce Monthly Burden
| Child's Age | Years to UG | Future Cost | Monthly SIP |
|---|---|---|---|
| 2 years | 16 years | ₹28.5 lakhs | ₹4,200 |
| 5 years | 13 years | ₹24.6 lakhs | ₹5,100 |
| 10 years | 8 years | ₹15.9 lakhs | ₹8,900 |
| 15 years | 3 years | ₹10.4 lakhs | ₹25,000 |
Key Insight: Starting at age 2 vs 10 cuts monthly SIP by 52% despite higher total corpus!
Step 5: Choose the Right Investment Mix
10+ Years to Goal (Child 0-8 years)
- • 80% Equity Mutual Funds: Multi-cap, flexi-cap for growth
- • 20% Debt/Balanced: For stability
- • Expected Return: 11-12%
5-10 Years to Goal (Child 8-13 years)
- • 60% Equity: Large-cap, index funds
- • 40% Debt: Hybrid funds, children funds
- • Expected Return: 9-10%
Less than 5 Years (Child 13+ years)
- • 30% Equity: Conservative equity funds
- • 70% Debt: Fixed deposits, debt funds, PPF
- • Expected Return: 7-8%
- • Goal: Preserve capital, reduce volatility risk
Special Instruments for Education
- Sukanya Samriddhi Yojana (Girl Child): 8%+ tax-free returns, lock-in till 21, up to ₹1.5L/year
- PPF (Public Provident Fund): 7-7.5%, 15-year lock-in, tax-free, partial withdrawal after 5 years
- Children's Mutual Funds: Auto-rebalance from equity to debt as goal approaches
- ULIPs: Insurance + investment, but high charges—generally not recommended
What If You're Running Short?
- 💡 Education Loans: 8-12% interest, tax benefit under Sec 80E (interest deduction)
- 💡 Scholarships: Merit-based, need-based—research early
- 💡 Part-time Work: Students can earn while studying abroad
- 💡 Community College (Abroad): First 2 years at lower cost, transfer to university
- 💡 India First, Abroad for PG: Splits the financial burden
Don't stress if SIP shows a gap—the planner helps you plan early, and alternatives exist.
Real-Life Examples
📘 Example 1: UG Engineering in India
- Child Age: 3 years | Goal Age: 18 | Time: 15 years
- Current Cost: ₹8 lakhs → Future Cost: ₹28.3 lakhs
- Already Saved: ₹1 lakh → Grows to ₹5 lakhs
- Monthly SIP: ₹4,800 → Builds ₹28.5 lakhs
🌍 Example 2: MS Abroad (USA/UK)
- Child Age: 8 years | Goal Age: 22 | Time: 14 years
- Current Cost: ₹70 lakhs → Future Cost: ₹2.17 crores
- Already Saved: ₹10 lakhs → Grows to ₹42 lakhs
- Monthly SIP: ₹47,000 → Builds ₹2.2 crores
- Alternative: UG India (₹25L) + Education Loan for MS (₹70L)
🎓 Example 3: Late Start (Child 12 years old)
- Child Age: 12 years | Goal Age: 18 | Time: 6 years
- Current Cost: ₹8 lakhs → Future Cost: ₹13.4 lakhs
- Already Saved: ₹0 → Must build full corpus
- Monthly SIP: ₹13,500 @ 9% → Builds ₹13.5 lakhs
- Strategy: 50% equity, 50% debt for safety
Action Plan: Start Today
- Use Children Education Planner to calculate target corpus and monthly SIP
- Open a mutual fund account if you don't have one
- Start SIP in 2-3 diversified equity funds (large-cap + flexi-cap)
- Review annually, increase SIP with salary hikes
- Rebalance to debt 5 years before goal