As the new school year starts rolling for the first week of June, parents must make arrangements and prepare to look after their children’s education expenses. Rising costs mean that education needs to be understood for how the costs differ between metro and non-metro cities and, in what way, parents can go about planning for it.
Understanding Education Expenses
Education expenditure comprises some of the common expenses like tuition fees, school uniforms, textbooks, stationery, transport, extra-curricular activities, and technology such as laptops or tablets. Over the years, such costs have been rising and piling the pressure on families.
Education Costs in Metro Cities
However, in the metro cities the prices of the education facilities are a bit higher like in Bangalore, Chennai, Mumbai, Delhi, and Hyderabad. One of the reasons for that might be the cost of living; also, the infrastructure of the institutions is more advanced and most of the schools provide a lot of extracurricular activities. The parents in such cities pay extra to provide better facilities, popular institutions, and good enrichment programs.
Kindergarten Fees in Metro Cities
Kindergarten education fees in metro cities are exorbitant. Parents will need to spend, on average, about 100,000 rupees even in a school that has a moderate ranking. A high-ranking private kindergarten to grade 12 school would cost between 100,000 to almost 500,000 rupees a year. These facts of the matter—what such institutions charge—speak to how high on the agenda early childhood education is and the related resource endowment level of such institutions.
Education Costs in Non-Metro Cities
The cost of education in non-metro cities is considerably lower than in metro cities. Their schools lack many of the facilities or other programs that others have, yet they fulfill minimum educational requirements at a low cost. Of course, even at low cost, the quality of education could be good with dedicated teachers and a more focus on core learning.
How Parents Can Plan for Education Expenses
- Budgeting
First, project all your expenses connected with education, such as tuition, books, uniforms, transport, and extra-curricular activities. Doing this will give you a total of what is needed.
- Start Early
The early bird has an advantage. Open a separate bank account in the name of your child’s education. Put in money regularly into this account to build a good amount over time.
- Plans in Education Investments
You can also look at investing in education savings plans or child plans by financial institutions. These are plans which have been specifically designed to meet future education needs, usually return good returns, and thus help in amassing the large funds required for higher education.
- Mutual Funds and Stocks to Invest in
They can pay a price much better than any other savings bank account. Diversification across equity and debt mutual funds is suitable for long-term goals like education since it can create a balanced risk-reward ratio.
- Scholarships and Grants
Many schools, colleges, and organizations offer scholarships and grants to meritorious students. Encourage your child to apply for such opportunities that can tremendously lighten the financial load.
Increasing Cost of Education
The cost of education has been rising since the last couple of decades and at present, it is very high because of various reasons such as more demand for quality education and incorporation of advanced learning tools or technologies. Some recent studies reveal that education inflation has been rising at a rate higher than general inflation rates. Therefore, the need for strategic planning by the parents’ side is very important.
Need for Financial Planning for Education
Effective financial planning can bring about a sea change in the way that expenses toward education are managed. It is quite important that from the very early years of a child’s life, parents commence saving for them and make optimum investment decisions so as to be financially prepared for that eventuality without having to make any compromise on the quality of education.
With a new school year fast approaching, it is ever more important for parents to be cautious about planning for educational expenses. Be it metro cities like Bangalore, Chennai, Mumbai, Delhi, or Hyderabad, or non-metro cities, being aware of the fees, studying the expenses, and making astute financial decisions are going to help you provide your children with the best education possible. Invest well in mutual funds and stocks, tuck money into your savings, and make the best use of scholarships to see you through these rocketing costs.
