A GUIDE FOR FINANCIAL PLANNING FOR YOUR CHILD’S UNIVERSITY EDUCATION EXPENSES
The moment your child is born the countdown begins. Every day reminds you about the huge corpus you will require for your child’s higher education. Saving for your child’s higher education is one of the major financial goals that everyone has in their life. Today, on a mission to put their kids through a good university, parents take on extra work, sacrifice their holidays, and borrow money. However, the financial stress and burden vary on your choices you make for your child’s career.
Studies reveal Indian parents spend approximately Rs 3.62 lakh for their child’s under-graduation and post-graduation studies. This study encompassed around 505 parents and 100 students from across India. Mentioned below are the findings from this survey.
- Students take up jobs to fund their higher education
- 74% of the students work while they study
- 52% of the students struggle to gain career experience
- Over 33% just need enough money
- Over 29% work to connect with new people
- Over 25% are doing it out of compulsion
(Source: ET Wealth)
The Types Of Debts That The Parents Take For Their Child’s Higher Education –
- 31% go for short-term loans
- 26% borrow from family and friends
- 24% go for long-term loans
- 21% lend from a credit card
(Source: ET Wealth)
Does This Loan Cover The Entire Cost Of Their Child’s Higher Education?
The answer is a big No! The study reveals Rs 4.15 lakh is the shortfall between what parents contribute and what students claim they spend on higher education.
How Are Parents Support Their Child’s Higher Education?
79% of parents pay for their child’s higher education from regular earnings
60% take less expensive holidays
57% cut-off on leisure activities
49% took on extra work
(Source: ET Wealth)
A Brief Summary Of The Expenses That Add Up Over The Entire Course Duration
The cost of higher education is far beyond the course fees. It comprises of various aspects like –
Approx. Rs 2.90 lakh towards course fees
Approx. Rs 1.45 lakh towards accommodation
Approx. Rs 23K on academic material
Approx. Rs 48K on bills and utility charges
Approx. Rs 50K on attire and cosmetics
It is worth noting that apart from course fees, other major expenses include eating out, food and groceries, entertainment, transportation, credit card loans, holidays, etc.
Things Worth Considering While Planning For Your Child’s Higher Education
#1 Start Early. Drive Slowly. Reach Safely.
It’s very crucial to start early, while you plan for your child’s higher education. At the same time, it is also important to seek professional help to make better investment choices.
#2 Know the figures & Be Realistic
Don’t just calculate the course fees. Take into consideration all the costs and inflation. This will give you a fair idea of how much you actually need to accumulate.
#3 Inculcate good financial habits
Teach your child to use budgeting tools and online calculators. Also, make them understand the importance of avoiding extravaganza.
