May 13

Create an Education Budget for Your Child

Few days back, I was discussing with one of my friends how education expenses of our children have risen in the last five years. He narrated an incident of his colleague who has two children. For the first child he paid Rs 10,000 per annum for playschool expense four years back. Now his second child is also admitted in the same school and he has to pay the same fees but on quarterly basis. What makes it worse from him is that he has got raise in his income was only 10-15% in the last two years

This is the plight of majority of parents today. An extraordinary rise in cost of child education is creating nightmares for them. Although, most parents plan for their kids’ dream education, it happens only when the child starts going to school. Also, more than estimated increase in the cost makes it difficult to meet the expenses and they end up spending more than 50% of their income only on raising their child.  Sometimes for a larger family, the situation becomes worse and children have to take up part time jobs to cope with the rising expenses.

Hence, it has become necessary that parents draw an education budget as soon as the child is born. Financial planning is a solution to this, to a great extent. However, parents who have not resorted to creating a financial plan for themselves should avoid ad hoc investments and create an expense budget for their child education.

Although, the primary reason of rising cost of education is the school fee, there are other expenses which are very integral to the school curriculum and have risen manifold in last few years. A recent survey done by ASSOCHAM on “Parents wary of rising education cost of kids” of young parents for their children education, has revealed that average spending  on a single child at primary/secondary education on expenses other than school fee has gone up from Rs. 35,000/- in 2005 to over Rs. 65000/- in 2011.

So what are these expenses parents should be aware and how do they affect the monthly budget:

  • School fee: The school fee comprises of many heads like school fund, computers, activity and projects. These tend to increase every year. The tution fee which was Rs 12,000 a year is now Rs 14,000. Many schools charge a hefty amount in the name of school fund. For a middle class family, the hit in household budget is unbearable. Check the fee structure in detail before you complete the application process.
  • School uniform: The average rise in cost of the school uniform of children has been from Rs 50 to Rs 200. The highest has been footwear which costs around Rs 2,000 – 3,000 per year. What concerns most of the parents is the availability at only school specified shops, where charges are two – three times higher than normal. This forces parents to buy at the increased price only.
  • Text books and stationery: One has to buy books and stationery items from the school bookshop only. It costs Rs 2,000 for a nursery admission. The increase is almost 10% if you look at previous year. Again, this is a situation where the parents have to bear the steep raise in the costs. Compare the total cost with the market and avoid buying unnecessary items like stationery.
  • Transportation: With rise in petrol and diesel prices, the cost of transport for sending your kids to school has increase drastically. Auto rickshaws have been demanding Rs 100 to Rs 150 more as compared to the previous year. For a middle class family using their own transportation is difficult as the petrol cost hits the monthly budget very badly. Bargain for the best price.
  • Coaching classes: There are some schools where coaching classes has been made mandatory and parents have to shell out 15-20% more than the previous year. Where it is not compulsory, the school advises parents to engage private tutors. Although parents are concerned for their kids’ education, this has been more of an exam phobia. Parents are the best tutors. Give maximum time to the child and the need of engaging tutors will not arise, at least at the primary level.
  • Extracurricular activities: Academics is not the only thing that parents want to develop in their child. Growing competition is forcing parents to make their children learn the skills they enjoy the most. So majority send their kids to extracurricular activities like swimming, dancing, painting, etc. The expense for these has also increased in last few years. However, this becomes the primary target to cut short from monthly budget, if the latter stretches too far. Avoid discouraging your child from his/her hobbies.
  • Miscellaneous expenses: School trips, drawing competition, annual function etc. are some of the expenses where parents have to shell out. Although not a major expense, but with rising cost these also become a cause of concern.

It is very difficult to exclude any expense from their kids’ dream education as it has become the need of the hour. However, one should be well aware about the cost related to their child’s education and same should be included in their education budget. Planning ahead by creating a financial plan can answer most of the queries, if not all, but the start has to be made by the parents.



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  1. Jitendra,

    Very good article, nicely explained.
    Education expenses have increase drastically over the last few years.
    I think its high time the Education Minister streamline the process.


    1. Very thanx Rakesh.

      Education expenses for children is now in highest % of our expenses.Sometimes it grows up to 60% of our annual budget.Hence we should start looking at this very minutely so that it does not hit our other goals of life. Also,one reason for such scenario is the emotion attached with these decisions.


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