With skyrocketing fees, school admission needs careful financial planning too
Hello Gruhinis!
A Christmas holiday plan must be on the top of your list.
But not for my Gruhinis with young kids, I know. In the rush for the school admissions, holidays must have gone down the priority list because getting your kids in kindergarten or even in first grade school in India can cost you anywhere between Rs 1-Rs 2 lakh (it could exclude the meal and transport cost). And if you got twins, it’s a Rs 2-4 lakh hit on your bank balance. Aiming for an international school means that fees for a single child could go up to Rs 4-6 lakhs. Schools may not ask for the whole amount upfront but its big enough amount that can mess around with our monthly spending plans.
The amount we spend on one child’s education (including overheads such transportation, tuition) has gone up from Rs 35000 in 2005 to Rs 94000 in 2011, as this survey highlighted in 2013. As new schools come up, this figure is only going to go up.
So my Gruhinis, we have no choice but to start planning for the school education as well. By planning I mean, setting aside savings that can be utilized to fund such lumpsum expenditure.
Your Gruhini has listed out three stages in which you ought to plan for this milestone event.
1. Is your Kid ready for the Primary School?
There is not much time for planning. You need to act. If you have been investing for this purpose, its time to withdraw or redeem those investments. If the investments are linked to stock markets, its a great time to encash the gains. More importantly don’t feel guilty about withdrawing long-term investments to fund expenditure as it’s a good time to encash some of those gains. “If there are impending expenses like school fee payments, this is a good opportunity to cash out from stocks” says Suresh Sadagopan, Founder, Ladder7 Financial Advisories.
Well if you haven’t been investing your savings for this purpose, then you might have to carefully plan your monthly expenditure for next few months.
