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How to beat the escalating cost of education?

  Jun-11-2018 |  626
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Rising cost of education has become a critical factor for parents in recent years. A booming, aspirational middle class has ensured that demand for all types of educational courses is strong and there has been an across the board spurt in the tuition fees and other educational expenses. This has made the overall financing decisions extremely important from a long term perspective. Needless to say that sound planning is needed these days to counter the ever escalating cost of education and ensure world class learning outcomes for your children. Not just the tuition fees, but the other expenses linked to the academics, travelling costs, fees for private coaching classes, project works and other extracurricular activities have been soaring and require a special attention in personal financial planning and investments.

The overall costs of higher education in India are elevating every year and professional courses tuition fees are fairly high compared to what they were around a decade ago. For overseas education, there is the additional element of currency values and given that the Indian Rupee has been weakening over the last few years, the total expenses involved in sending your child for a coveted foreign degree have become quite prohibitive. Moreover, education loans from banks tend to finance just a part of this cost. This means that the situation has become tricky for parents who are looking to provide the best of the education for their children. Many a times, lack of proper financial planning could lead to brilliant students having difficulties in pursuing their fields of interest or could end up having to settle for some other degrees than the professional courses best suited for them.

According to a survey by The Associate Chambers of Commerce & Industry of India’ (ASSOCHAM), the average cost for a single child’s primary/secondary education has gone up from 55,000 rupees in 2005 to 1,25,000 rupees per annum in 2015. While the annual income for an average for the well-off parents has edged up around 30% in the corresponding period. The survey noted that 78% parents feel that it is impossible to pay for even one child’s education when only one member works. Meanwhile, the economy is growing at a steady clip and there are likely to be multitude of opportunities for well educated and talented youngsters in coming decades. Good quality education and deep insights as well as a nurtured mind are likely to be prerequisites for the coming era. Here are some useful tips to beat the escalating cost of education.

Plan early for your childs education

The starting point would be to assess your current income and the future course of action. While it is not possible to decide in advance how the future is going to shape up, the general trends in your incomes and likely swings could be considered to chalk out a detailed plan for funding your kid’s education. Give due important to the overall expenses and look for new avenues of increasing incomes as well.

Keep the focus clear

Always keep the focus clear as regards your child’s education and extra/co curricular activities. Do not burden the kids with unnecessary courses/tuitions and rather have them explore on their own what suits them the best. You can take the help of professional educational advisors for this. Maintain the focus on what the child wants to do in order to decide the coursework and the future professional study plans. This would bring in a lot of clarity about the potential funding requirements once the kids join college to start higher education.

Invest regularly and diligently

Invest on a regular basis without fail. Resort to Systematic Investment Planning (SIP) which would ensure that your investments unlock their true potential over a period of time. Also put in sufficient funds in quality Mutual Funds and corporate deposits in order to get more returns than the regular fixed deposits.

Maintain regular check on finances

Maintain a tight balance and keep a regular check on your finances. It is advisable to avoid unnecessary expenses. Always stick to your long term plans. Use any unexpected gain in wealth or income like bonuses in a proper manner. Plan smartly -look for new opportunities in investments and don’t shy away from changing course once it is clear that your current plans are not working as per expectations.

Keep up with latest trends in education

Explore new avenues in the field of education. Search for quality institutions offering better facilities at a less cost. Talk to friends, relatives, and colleagues etc in order to search for patterns in courses and try to get an idea about the general trends in fees and scope for various courses. It is also recommended to look out for slightly off the track courses or lines of education which may offer excellent potential for your children in coming years.

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