Recovering The SelfA Journal of Hope and Healing


A Guide to Help You Save for Your Child’s Education

by Shiv Nanda

No doubt education is important. But the costs are a major concern. If you want your child to have a good education, you need to have a plan in place to save and budget your child’s education expenses.

In this article, we have put together a guide to help you get focused and save for your child’s future.

Child’s Education image

1. Estimate the cost of education

The first thing to do is to figure out how much is it going to cost. It’s impossible to determine the exact figure because you may not know as yet what your child is going to be when he or she grows up. So, you just need to play safe and base your calculation on an estimated figure. However, while estimating the costs, factor in the age of your child, current education cost, and the likely inflation.

2. Check where you stand financially

Take time to check how much you can afford to save. Track your expenses. Assess your assets and liabilities. Create a budget; use an online budget planning tool to help compare the income and the outflow every month. This will give you a realistic picture of what you can afford to save.

3. Start saving early on

The best time to save is NOW. Set up a saving account. You’ll have a longer time horizon for your education fund to multiply into a bigger corpus; Thanks to the power of compounding.

4. Review your budget regularly
Your financial situation may change over time. So, it’s a good idea to review your budget from time to time. You may get a salary hike, or your income may reduce; whatever the situation is, you must save. Just, adjust your contributions accordingly.

5. Take loans if required

If it’s absolutely impossible to increase your monthly income, and what you’ve saved isn’t enough, you don’t need to be stressed. There are funding options available.

  • You can take an education loan to finance your child’s education costs.
  • You can opt for a personal loan to fund your child’s education abroad or in the country.
  • You can apply for scholarships and grants.

Note: An education loan may not cover all the cost associated with education. For example, if your child has to relocate to another city or country altogether, an education loan may cover direct education costs, like tuition fees, hostel fees, etc., but it may not cover indirect education costs, like food bills, transportation, emergencies, etc. In such a situation, it is advisable to have a personal line of credit along with an education loan. A personal line of credit for additional expenses related to your child’s education is a good idea as the line is available to use whatever and whenever the need arises.

6. Invest in your own name.

Don’t be carried away with emotions and save in your child’s name. Even if the savings is meant for your child’s future and it is your child, who is going to ultimately benefit from your prudent savings. But, it is your money and you need to exercise control.

Remember, your child is going to be 18 someday, and if the money is saved in your child’s name, he or she can technically use the money for anything – that may or may not include education.

7. Make your contributions automatic.

Set up automatic debits from your salary account to your savings account. This way you won’t forget to make regular contributions towards your child’s education.

8. Have a profitable investment portfolio.

Invest in the right basket of assets to build a powerful portfolio. Child plans, mutual funds, SIPs, PPF are some of the investments options you may have. Research, compare and select the right investment vehicle that ensures profitable returns.

9. Include family in your plan to save.

Encourage grandparents, godparents and other family members to make contributions towards the education fund instead of gifts at festivals, birthdays and other events.

10. Don’t be too hung up on the name.

When it comes to choosing the school, college or university, you need to make smart decisions. Don’t get carried away with prestigious names, rather choose a school, college or university that provides good education at a cost you can afford.

11. Figure out earn more.

The monthly income inflow and the outflow may not allow you to save enough. If possible, find an additional income stream. Do some freelance work, or try to pick up projects to do in your free time.

12. Don’t spend where you can save.

Think of ways where you can cut costs. Spend on things that are absolutely necessary. An example of this would be: Borrowing notes and study material from seniors is a saving technique. And spending on coaching for better studies is a cost you can’t escape; It’s an investment rather than a cost.

About the Author

Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India’s first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics, so email him your questions at



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