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That’s a common mistake that all parents do. I mean taking a unilateral decision on what our children are going to do in future. In the name of arranging a suitable life for our children, we often super impose our old ( and obsolete) preferences and biases.
Your parents, they give you your life, but then they try to give you their life. (Chuck Palahniuk, Invisible Monsters, 1999)
The best way, obviously, is to help the child discover their own interest area and to facilitate that process.
Yesterday, I came across this press note from Aviva about a tool that help parents plan & calculate for their child’s higher education.
Here’s the link to the tool.
Educost
Aviva’s online insurance calculator, “Aviva Educost” helps to calculate the amount you would require to secure your child’s education. This application comes with 20 career options and a comprehensive list of 145 institutes across the world to choose from.
More interesting is that it claims to factor in the rate of inflation, hidden education costs like coaching/preparatory fee and application charges, cost of living if your child moves to another city or abroad, along with course fees, Educost gives you a fairly accurate idea of the financial implication of your child’s higher education.
I used the tool and got the following result:
- Shashwat Education Cost
My Wishlist:
I would have liked to understand the assumptions. For example what is the rate of inflation that has been factored in.
Is that amount required as on today, or is the inflation corrected amount after “n” number of years when my son will be ready to join FTII. And what is the assumption there about the number of years when my son will join FTII.
Conclusions:
In any case, education is undoubtedly the best gift you can give to your child. And a bit of planning for the child’s education is a good thing to do. And this Educost tool is a useful application to help you chart out a blueprint.
I also believe that life unfolds itself, and with utter disregard to your plans to achieve this or that. As Dwight D Eisenhower says:
Plans are worthless, but planning is everything. There is a very great distinction because when you are planning for an emergency you must start with this one thing: the very definition of ‘emergency’ is that it is unexpected, therefore it is not going to happen the way you are planning. (Eisenhower quotes)
Update: I asked the person who sent me the press note about the assumptions and their response is as under:
The assumptions are:
i. Inflation @ 8%
ii. Cost of Education : This refers to the current cost of Education or the course fee. The time period for calculation of this is 18yrs-Current age of child
iii. Cost of Living : This refers to the current cost of Living in the city/country where the particular course will be taken. The time period for calculation of this is: (18yrs+ total yrs of course )-Current age of child
iv. Cost of Preparation : This refers to the current cost of preparation for the course fee. The time period for calculation of this is: 18yrs-( Current age+2yrs)
v. The total cost is the sum of all 3 above and shows the cost required when the child will be eligible to undergo the course i.e 18yrs
Apart from this there is a standard disclaimer that the cost is illustrative and generic in nature and are based on the information collected from a random sample of public and private institutions in India.
I edit Personal Finance Online Resources, nurture Financial Literacy Foundation, deliver Financial Awareness Workshops and have built a desktop RupeeManager.
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Thanks for the this. I am really glad that aviva came up with such a unique concept.
Looks interesting!