Parents want the best for their children, especially a good education. The rising inflation rate makes it difficult for parents to determine the amount they need to save for their child’s education.
Understanding the actual education costs with the help of a college cost calculator is important so that parents can become aware of the potential expenses. It surely becomes easy to plan, start early investments, and build a future education corpus.
Here’s a guide to calculating education costs for parents! This blog will help parents to get an estimate of future expenses and plan accordingly.
What is an education cost calculator?
An education cost calculator is a tool that helps the user to know about future education expenses effectively. It is easy to use and gives the best estimates so that parents can make necessary changes in their plans to suit their requirements.
The education calculator considers future value, inflation, number of years a person has to save and then calculates the amount.
The objective of using an education calculator is to make the process easy and smooth. Once the calculator gives out the estimated amount, parents can take the help of financial experts to create a roadmap for achieving financial goals.
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Steps to Calculate Education Costs
Education inflation is at an all-time high, and it has led to a rapid rise in education costs. Parents need to factor in several metrics to get the nearest estimate of potential costs.
1. Calculate the current cost
Determine the cost of education based on current market value. Suppose you want to send your child to the UK, then calculate the current amount you need to send your child abroad.
If you want to send your child to a reputed college in your home country, then calculate the total cost needed for that degree course in terms of the current fee structure and associated costs.
It is now easy to visit the sites of reputed universities and learn about their fee structure and associated costs to get a general idea of the amount required for studying a specific course.
Parents can take the help of education counselors like the ones at Edufund to calculate the current amount needed for higher studies.
2. Determine the number of years
Parents wanting to know about the education costs down the line need to determine how many years they have to save to create an education fund.
Is your child still young, or will they be ready in a few years to join the high school? Suppose the child is now 6 years old and they will need the money for higher education when they are 17 years old. The parents then have a maximum of 17 – 6 = 11 years in hand.
How many years approximately a parent has is important as the number of years affects the amount you can build. If a parent has a smaller number of years, then he needs to save a higher amount which might prove difficult for a middle-class family.
3. Consider the rate of inflation
The amount you have calculated based on the current scenario will not be feasible down the line. Suppose your child enters college after ten years then the amount needed at that time will not be the same.
You can consider the overall inflation rate or use available breakdowns. It is vital to factor in the inflation rate to determine the costs that will go up in the future for correct estimates.
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4. Consider the expected investment return
Be realistic while determining the expected investment returns. Remember, when you have a clearer picture, it becomes easy to take the necessary steps that will take you closer to your desired goals.
5. Consider the education calculator
Parents should consider an education calculator to give them the nearest evaluation of the amount parents should save to meet future education costs.
The use of an education calculator will ultimately prove beneficial in making effective plans for the future.
Once the parents have all the necessary information, then simply key in the details as per the instructions. The education calculator is an important guide to calculating education costs for parents as it will provide the probable future education cost and the monthly savings that need to be undertaken to build that amount.
Edufund’s college cost calculator is a comprehensive education calculator that can calculate the potential education expenses and give the nearest amount needed to meet your child’s education costs.
It will also provide the parents with an estimate of the monthly savings that need to be undertaken to achieve goals.
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Conclusion
The guide to calculating education costs for parents gives easy access to the required know-how and helps in making informed decisions.
An education calculator like the one at Edufund helps to meet the educational needs of a child successfully. It is a blessing in disguise because besides providing estimates and extensive information, it helps to save the cost estimates and alter them to suit individual needs.
