The Cost Of Your Child’s Future Is Rising! Are you Keeping Up?!
Our recent seminar with the students of Ruh Continuum, from grades 4 to 11, was one memorable experience. What we expected to be a simple financial awareness session turned into something far more meaningful. A room full of young minds, curious eyes, and questions that many adults hesitate to ask. From “How does money grow?” to “What should I start doing now if I want to study abroad?” to “How can I start saving money from this young age?”. The level of awareness and curiosity was truly inspiring. Some of the questions were complex, thoughtful, and deeply practical. It was fascinating to see children so focused at such a young age.
We often say, “Children are the future.”But the real question every parent must ask is - Are you doing enough for your children? Or more importantly, are you doing the right things for them?
Because loving your children and planning for them are two very different responsibilities.
Every child today has dreams without limits. One wants to become a scientist, another wants to build a startup, one dreams of studying abroad, another of becoming an artist or a sportsperson. The world today offers opportunities that were unimaginable a decade ago. But with these rising opportunities, there comes a reality that the costs are rising faster than ever.
Education inflation
India and abroad have one of the highest forms of inflation we face today. Studying abroad, professional courses, specialized training and global exposure, all come with a price tag. And if we do not plan early and plan right, dreams often get adjusted to budgets rather than budgets getting properly segregated for dreams.
The right planning for your child is not about saving whatever is left at the end of the month. It is about building a structured path that grows along with your child. When planning begins early, time becomes your biggest ally. Compounding works silently in the background, turning small and disciplined investments into powerful financial support systems for the future.
Let's use this simple graph - If you invest ₹5,000 per month for your child starting from age 5 and continue till age 20, the total investment over 15 years would be ₹9,00,000. With long-term compounding (around 12%), this can grow to roughly ₹25,00,000+ by the time they turn 20.
Now this is just an example with ₹5,000 per month. (Just for a simple illustration)
Always remember that your investments must be aligned to real goals, and done through a proper financial plan. That’s why starting early with the right structure and clarity truly makes all the difference.
However, this is also where many parents unknowingly go wrong. In the name of planning for children, many are often mis-sold products rather than being given real plans. You may have come across child investment plans, child future schemes or guaranteed education plans. These names sound comforting and reassuring, and they appeal strongly to the emotional side of parenting. But in reality, many of these are simply ULIP-based products packaged attractively.
They often come with:
- High costs,
- Long lock-in periods,
- Limited flexibility and
- Returns that may not effectively beat rising education inflation.
While the intention of parents purchasing these products is genuine and rooted in care for their children, they unfortunately end up with solutions that are far less efficient than a well-structured investment approach.
“True planning is not about buying a product. It is about building a strategy.”
A simple way to understand this is through a movie analogy. Think of a grand film like Baahubali. Before any major battle or victory, years of preparation went into building the kingdom by training warriors, strengthening resources and creating a strong foundation. The victory did not happen overnight. It was the result of consistent preparation over time. Your child’s education journey is similar. When the time comes for college admissions, studying abroad or pursuing specialised careers, that moment is your “battle day.” If preparation has been happening quietly for years, you stand strong and confident. If not, you are forced into compromises.
“Starting early is what builds that strong financial kingdom in the background.”
So, What Can You Do Instead?
The answer is simple - Start early but more importantly, start right.
- Focus on long-term instruments that beat inflation and help wealth compound steadily.
- Build separate goals and keep reviewing your plans as your child grows and their dreams evolve.
- Increase investments gradually as income grows.
“Planning for children is not about predicting their future, it is about being prepared.”
And while education remains one of the biggest goals, we must also stay mindful of other rising costs in healthcare, lifestyle inflation and global opportunities. Starting early does not just reduce financial pressure later, it is mainly focused on giving your child the freedom to choose their dreams without financial limitations.
As parents, you cannot predict exactly what their future will look like, but you can ensure that when the time comes, finances are never the reason to limit their dreams.
One day, when your child stands in front of their biggest opportunity, let your only answer be “Go ahead, we planned for this.”
That is the greatest gift you can give them!
If you want to ensure you’re planning the right way for your child or if you’re just getting started and want clarity, we’ve created a Detailed Document that breaks down the entire process step by step. Comment “Document” and I'll share it with you.
Akash Neelakantan Salvady | Wealth Manager at IFS