Make A Plan Now So Your Kids’ Dreams Stay Affordable

Children’s Day is a time to celebrate the joy of raising children and also a moment to reflect on the financial responsibility that comes with it. From rising school fees to college costs that rival global standards, parenting today requires as much planning as affection. The reality is that the price of parenting is increasing faster than most families can anticipate.

Here’s what’s driving the change and how you can prepare financially.

The Soaring Cost Of Raising Children

Recent estimates suggest that raising one child in an urban Indian household can cost around ₹45–50 lakh by the time they complete their education. Education alone can consume 40–50% of this amount, with school fees, coaching classes, and extracurricular activities adding up quickly.

In metros, private school fees in higher classes can touch ₹8–12 lakh a year, and professional college tuition (engineering, medicine, management) can cross ₹20–25 lakh. Add in lifestyle, healthcare, and digital learning costs, and the numbers become overwhelming for most middle-income families. This pressure is also shaping choices, with more couples delaying parenthood or opting for DINK to maintain financial freedom. But for those who plan to raise children, early planning is key.

What Parents Can Do: Smart Steps for a Secure Future

• Start early

Begin investing as soon as your child is born (or even earlier). A Systematic Investment Plan (SIP) in an equity or hybrid fund can help you accumulate wealth over 15–18 years.

For example, investing ₹5,000 per month for 18 years at an assumed 10% annual return can grow to about ₹28 lakh, which could be enough to cover a major portion of higher education costs.

• Align Investments with Education Milestones

Break your child’s financial needs into milestones like school, college, and post-graduation. Use a mix of funds:

• Equity funds for long-term goals (10+ years)

• Hybrid or Balanced Funds for mid-term goals (5–10 years)

• Debt or Short-Duration Funds for near-term needs (under 5 years) This approach balances growth and stability across different time horizons.

• Beat Inflation with Growth-Orientated Investing

Education costs typically rise at 8–10% annually. That means traditional savings or fixed deposits may not be enough. Equity funds, though market-linked, can help your corpus grow faster over time and counter the impact of rising costs.

• Automate and Stay Disciplined

Automating your SIP ensures consistency. Staying invested helps benefit from rupee cost averaging and compounding. Avoid pausing SIPs unless absolutely necessary.

• Protect and Review

Both life and health coverage are critical. It ensures your child’s financial requirements are met in case something untoward happens to you. Also, review your investments every year to adjust for income changes, inflation, or shifting education targets.

The Bigger Picture: Balancing Dreams and Goals

Raising a child is deeply rewarding both emotionally and financially. But managing the rising “price of parenting” means making conscious financial choices today. Early planning through mutual funds can turn large future expenses into achievable milestones.

This Children’s Day, take the first step toward securing your child’s dreams; not just with love, but with a plan.

Source Footnotes:

• India Today, “Cost of raising a child in India,” June 27, 2025

• The Logic Stick, “The cost of raising a child in India,” 2024

• NDTV, “High cost of raising children sparks debate,” 2024

Disclaimer: *Past performance may or may not be sustained in the future. The calculations provided above are based on assumed rate of returns and it are meant for illustration purposes only. SIP does not assure a profit or guarantee protection against loss in a declining market.

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