Here's how to do financial planning for your child's education

One significant financial objective for millennials is ensuring the education of their children. The inflation rate in education has surged notably, standing at approximately 11-12%, in stark contrast to the consumer price inflation of 6%.

This suggests that education costs could potentially double every six to seven years.

Harshvardhan Roongta, a Certified Financial Planner (CFP) at Roongta Securities, underscored the need for planning ahead when it comes to education expenses.

He emphasised the necessity of making financial provisions well in advance, particularly for families contemplating overseas education for their children.

According to Roongta, the current estimated annual cost for an undergraduate program abroad is around $100,000, encompassing tuition fees, accommodation, and other living expenses.

He pointed out that expenses may vary depending on the location, with countries like the US and Canada generally having higher costs compared to places like Singapore.

Roongta recommended that parents initiate the planning process for their child's education as early as possible, ideally when the child is one year old or even younger.

By commencing the planning process early on, families can distribute the financial burden and establish a more robust financial cushion to meet future educational expenses.

Prableen Bajpai, founder of Finfix Research & Analytics, acknowledged the financial commitment required to fund a child's education.

Endowment plans and Unit Linked Insurance Plans (ULIPs) provide options for long-term savings with insurance coverage.

Market-related products: Mutual funds offer a flexible and simpler route for parents looking to invest in market-based instruments to potentially generate higher returns over the long term.

Fixed-income options: Government-backed schemes such as the Public Provident Fund (PPF) and Sukanya Samridhi Yojana (SSY) provide stable and secure investment avenues for parents seeking fixed-income options for their child's education.