Source: Economic Times

"It’s a girl," says the nurse to the couple. The couple has been waiting for this moment and is elated by the good news. Be it a boy or a girl, every parent has a great desire to give the best to his/her child. An additional member into the family brings joy and cheer to everyone, but then there are responsibilities too.

The responsibility to give the best education involves a lot of money. From playschools to post graduation, education costs are rising. Our estimates indicate that it could cost on an average Rs 21 lakh (at today’s prices) on education of a single child from school to college. This includes expenditure on school fees, coaching classes, books, stationery and so on. If you have to include post-graduation studies as well (MBA for instance), the cost is even more. It reaches Rs 98 lakh.

How long is the child dependent on you?

Before drawing the financial plan you have to know how long the child will be dependent on you. For that, you have to really plan for your child from around six months before the baby is born to his/her estimated age of marriage. In some cases, it could be till the child continues to study. Ideally, parents should have buffer money to take care of overruns and contingencies. For example, Nitin Vijan’s budget for his daughter Vedika’s education looks like this. Rs 55,000 a year up to Vedika’s junior college; Rs 3 lakh for the four-year engineering course and Rs 20 lakh if she plans to pursue her masters in science or an MBA.

Expenditure graph

Estimates show that there are higher expenses (not necessarily on education) when the child is in the age bracket 1-5 years. Subsequently, costs tend to lower once the child reaches the age of five years. Again, the expenditure mounts when the child touches 15 years of age. Parents spend in the range of several thousands up to a lakh just on coaching classes and tuition.

Says chartered wealth manager and certified financial planner Kartik Jhaveri: "Parents want to give the best to the child to prepare him/her for the board exams and to come out with the best of results. They do the same but even on a larger scale for the 12th standard. In this case, it’s even more crucial especially, if the parent is planning to sponsor the child’s professional course."

Graduating from college

Here the expenses really depend upon what course the child plans to pursue. Professional degrees such as engineering or medical are even more expensive than regular graduation courses. Again here there is another variant. If the child is studying here, expenses can still be under control. But if the child plans to pursue overseas education, then the expenses can touch the roof. Finance options are available to fund overseas education.