Estimate the real future cost
The first mistake most parents make is saving for today's fee, not tomorrow's. Education inflation in India typically runs higher than general inflation. A degree that costs ₹20 lakh today could cost ₹50-70 lakh in 15 years.
- List every milestone: school fees, coaching (IIT/NEET/CA/CAT), undergraduate degree, postgraduate degree, and study-abroad costs if relevant.
- Apply an education inflation rate: use 8-10% per year for school fees and 10-12% for professional / overseas courses.
- Build a year-by-year target: break the big number into goals like "Class 12 coaching by 2032" or "Engineering fees by 2035."
Choose the right investment mix
Your child's age decides how much risk you can take. The longer the horizon, the more equity you can include. As the goal date approaches, shift gradually into safer instruments.
Tax-free returns under EEE, sovereign guarantee, and currently ~7-8% interest. Ideal as the debt anchor of your plan.
Higher interest than PPF, tax benefits, and purpose-built for a daughter's education or marriage.
Child-focused hybrid or flexi-cap funds can beat inflation over 10+ years. Use SIPs and review annually.
Move accumulated equity gains into short-term debt funds or FDs 2-3 years before the fee is due.
- • 15+ years away: 60-70% equity mutual funds, 30-40% PPF/SSY
- • 5-10 years away: 40-50% equity, 50-60% debt
- • Under 5 years away: 70-80% debt/FDs, 20-30% equity
Convert the target into a monthly SIP
A large future number feels overwhelming until you break it into a monthly contribution. Use an SIP approach so the saving happens automatically before discretionary spending.
- Work backwards: divide the future target by the number of months left. This gives the minimum monthly investment needed.
- Assume a realistic return: 10-12% for equity-heavy portfolios, 7-8% for debt-heavy ones. Increase SIPs by 10% every year to beat inflation.
- Keep it separate: open a dedicated folio or label so you don't dip into education savings for emergencies.
Track goals in MyFinanceLens
MyFinanceLens has a built-in Education Goals feature designed exactly for this. Instead of spreadsheets, keep every child's target, current savings, and progress in one place.
Enter the child's name, goal name (e.g. "Engineering Degree"), target amount, and target year.
Record SIP contributions, PPF deposits, or one-time gifts so the progress bar stays accurate.
The dashboard shows percentage complete and amount remaining for every education goal.
Promotions, school changes, or new ambitions? Update targets and SIPs anytime.