Child Education Planning: Do financial planning for children’s education in rising inflation, here is the formula
It is critical for anyone to plan for the future in today’s world. In order to combat surging inflation, it is critical to keep a close eye on future inflation. Otherwise, your deposited capital will be diminished in the future, and you may find yourself in difficulty. In such a setting, every parent bears a significant obligation to provide their children with a better education so that they are prepared to pursue a job.
Higher education nowadays costs lakhs of rupees. At the same time, the expense of your child’s education will rise much more in 15 to 20 years.
As a result, when making plans for the following years, it’s critical to accurately calculate our inflation, which provides us a sense of what we’ll have to spend in the future. So, now, let’s talk about how to calculate inflation correctly based on inflation.
How the cost of Education will Increase
In today’s world, it is critical to begin planning for children’s education as soon as possible, should you encounter major challenges later. Engineering or any professional course nowadays costs around 7 lakh rupees. If we assume a 7% annual inflation rate, it will cost around 20 lakh rupees after 16 years.
You can also plan for your child’s higher education or post-graduation course in this way. In today’s world, a degree that costs 20 lakh rupees could cost close to 60 lakhs in 15 to 20 years. To figure it out, you’ll need to follow a few steps. As a result, you may quickly define a study goal.
How to Calculate using Formula
Before investing your money anywhere for studies, you should do this calculation so that you can get an idea of how much money you will need in future. For this you can use this formula.
PC = currently spent on studies
IC = future expenditure on studies
R = inflation rate
n= after how many years the child will do this course
According to this formula, if today a course is costing Rs 10 lakh, then after 16 years this course will cost about Rs 29.70 lakh.