The college admission season is turning very scary based on the conversations I hear from my colleagues and neighbours who have college going children. My daughter is a year old now, how can I plan for her education?
Chitra Gopalan, Chennai
Welcome to the reality of rising education costs, this is nothing but education inflation in action. Let us understand this with an example; suppose your daughter wishes to pursue engineering or any other stream that costs Rs 20 lakh today. By the time she is ready to enter college when she is 18, she will need Rs 74 lakh for the same, assuming 8 per cent education inflation. You could achieve this goal, if you start saving and investing for it immediately. Assuming your investment earns 10 per cent annually; you will need Rs 14,500 every month invested in a fund that would help you achieve this goal.
Remember, inflation is the biggest enemy when planning and working towards long term financial goals. Do not forget to factor inflation when planning long-term goals like retirement or education of children by assuming the costs incurred will be the same as they are today. With a little planning, you could easily achieve your future financial goals.
