Plan Out School Expenses with Education Loan and Investments

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We have again reached that period of the year when anxious parents lose their sleep over their child’s admission in good primary schools. As the fees in the international schools touch almost Rs 10 lakhs and the expenses in schools from conventional boards are no less than Rs 2 lakhs or Rs 1.5 lakhs, school admission of a child is a huge financial liability for which every parent must plan for. However, the reality is something else.

School decisions are guided mostly by social standards and not by income standards. When a neighbourhood kid or a colleague’s child joins an esteemed international school, we tend to feel the pressure of matching up. This compelling urge to compete drives us to enrol our kids in the newly mushrooming coaching classes that supposedly would prepare the children for the admission tests and interviews conducted by coveted schools.

Parents, these days, do not hesitate before paying huge sums of money for even admitting kids in such preparatory coaching classes! Be it a small or large sum of monetary resource required, you can simply take an education loan for your child’s studies. Below are some of the smart questions you should ask to the educational institute/school you want to admit your children in.

Ask yourself the following questions before opting for a school:

  • What is the kind of education that you want for your child?

Do you want a well-rounded and comprehensive curriculum that would allow your child to select subjects that interest them? Or do you prefer an academic-oriented curriculum that would prepare your child for all the vital entrance examinations in India?

  • What is the financial background of the families from which the kids are coming to the selected school?

Do you want your kid to study and grow up in a diverse environment? Or do you want your child to study with children from a financial background similar to yours?

  • Would you be able to meet all the incidental recurring expenses?

These expenses are mostly imposed by peers. Your child might expect to dine at fancy eateries every weekend or might even want you to take them on a foreign vacation, just because their classmates talk about these things that they do. You might find yourself spending a huge percentage of your income in fulfilling these demands. Thus, you may want to understand the incidental expenses and how to manage these before admitting your child to a school.

Ask the above-mentioned questions to yourself and get your expectations clear so that your money and time are well-managed.

Plan Well for School Admissions

Parents should ideally start investing when their toddler is just learning how to walk. Plans should be made at least 3 years before the child reaches the age of school admissions.  After you have decided about the school and the admission fee that you can afford, it is practical to assume a 10% nominal annual increase in fees. Calculate what the fees will be in 3 years time and make financial plans accordingly. Calculate the monthly investment that you will need to make.

If you have not planned from beforehand and your child has reached the age for primary school, you can liquidate your old investments like funds, shares, etc. for the purpose. You can begin making new investments keeping your next financial goal in mind.

Make wise choices and enjoy the admission times! You can also take a student loan from for your child’s education.

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