With the last running week of June, most of our kids would either already have started with their new session or are planning for the coming Monday 1st of July, 2019. New year, new session, new teachers, syllabus, friends and new Fee. While kids are excited to re-join the school, parents feel a bit of tingling due to the annually increasing education fee.

Irrespective of what grade your child is in, the fee is surmounting and ever-increasing. No industry is spared from the money-eater inflation, fuel, groceries, vegetables, any and all living essentials so is the education industry enjoying the boom. And as parents, there is no word like compromise when it comes to children especially their education. Hence, managing academic expenses has become a priority off-late.

But the question is, do we really plan these expenses or are they covered under the regular household expense? A few years back, education wasn’t as expensive as it is today, credits to the not-so-academic reasons. It used to get managed under the household expenses tab for most of the families but nowadays the picture is different and we seriously need to consider it.

All levels of education, primary, secondary and higher education are growing in monetary terms day by day. There is an annual 10-12% inflation in the education expense as a rough estimate which is huge. But again, do we really manage it?

While a lot of parents do work on their child’s higher education but in today’s times, the primary and high school level is equally demanding. While college fee can be funded through an education loan, how about the school fee? Do not commit the mistake of taking it as a child’s play, it is not.

 

Here we are with some facts that through light on the real expenses which the education industry demands and how to manage them;

Types of fee in school

  1. Yearly or one-time fee

This is a real digger in the pocket; name it anything admission fee, convenience fee, tuition fee, or whatever, but this is like an aggregate of the total fee a school charge. The biggest advantage of this fee structure is that it does not bother you every month or every term. Hence a co-related advantage, you can opt for investing your money in such a way that when it is school-fee time again, you can withdraw the required amount of funds and pay the fee.

The most suitable type of funds for this fee type would be the one which does not have any exit load with them as you would not want to lose any of your money during the transactions.

  1. Termly free

The second and most common type is the term-wise fee. This is a more convenient way of making payment as it would not require you to make any lump sum arrangements of money. You can invest your money accordingly such that you can withdraw a considerable amount as a fee whenever required. This will depend on your investments that the amount could be managed only with the returns or may require some principle withdrawals as well.

If you happen to withdraw a lump sum which you require only partially, re-invest the remaining money into liquid funds instead of putting them into savings. Liquid funds do not have any exit load hence they are very easy to be used plus provide almost instant liquidity.

Other expenses

While you start paying the fee of your school goings, you might as well have come across the fact that it is not just the tuition fee that the schools charge. There a lot of other expenses as well which when summed up to form a major chunk of money. These may include a fee for facilities like transportation, books, uniform, extra-curricular activities, sports, annual day, etc.

As the schools claim they focus on the overall development of the child, this development does not come for free. Moreover, if your child is talent in a particular sport or art, they may wish to pursue their talent as well side by side their studies which again calls for some coaching and training.

Hence, you need to make sure that you can fund their hobbies and studies.

Higher Education/ college

As far as higher education in India is concerned, you can still be relaxed as higher education can be funded through loans. But this nowhere means you do not save for your child’s higher education. A loan is a facility which should be availed only if you are not able to manage money for your child’s education. Do not forget that if you take an education loan, you and your child will have to pay it back for a considerable tenure at an inflated rate of interest.

Hence, make sure you do not consider education as another household expense these days. Be prepared for the education expense and save proactively with your child’s birth. Count it as one of the goals and work towards saving for it.

Education is one bucket you would never want to compromise on.

Start Investing!