Millennial parents’ worry
Though millennial parents are stretching budgets to offer their kids the best, experts believe there needs to be a practical approach, keeping in mind the increasing expense on education
From education to healthcare, millennial parents are leaving no stone unturned to offer their children a perfect lifestyle. However, thanks to exorbitant school fees, steep health care costs and maintaining that perfect lifestyle, millennial parents can’t seem to keep their calm.
Take for instance, New Delhi-based Nidhi Chandhoke, 34, a mother of a twoand-half-year-old boy, who says today’s kids are spoilt for choices. After Chandhoke, who works as an editor with Springer Nature India Pvt. Ltd., had her son, she took efforts to learn more about baby products through online platforms, but, unconsciously ended up getting hooked to international brands. From purchasing her son’s first Carter’s dress to SebaMed baby shampoo, she mostly orders products on the higher end of the price range. The reason: She wants to give her child the best, even at the cost of overlooking her budget several times.
Mumbai-based Mahesh Ghare, 36, who has a three-year-old daughter and is expecting a second child, echoes the same sentiments. Ghare, who works as a freelance consultant in the oil and gas industry, grew up in a chawl and wants to offer his kids things that he has been deprived of. Millennial parents like Chadhoke and Ghare are stretching their budgets to offer their kids a lifestyle, which is way costlier than what they received. To meet higher expenses, both parents end up taking full-time jobs, often leaving kids with minimal family support.
“The average expense on a child, including education, is around 15-25% of the total expenses of a family. This is the biggest chunk of the total expenses incurred by a family if you exclude the burden of a home loan,” says Nitin B. Vyakaranam, founder and chief executive officer, ArthaYantra, a Telenganabased investment advisory firm.
Of the total childcare expenses, the cost of education and healthcare increases at a faster pace, considering the double-digit inflation. “India has one of the highest costs of education for private schools to gross domestic product (GDP) per capita ratio, which comes to around 92.59%,” adds Vyakaranam. This indicates that the cost of education in India for private schools is very high as compared with the average per capita income of an individual.
RISING COST OF EDUCATION
Exorbitant school fee in metros have become a nightmare for parents, forcing parents’ association in Hyderabad to move the courts for a respite. This has now turned into a social menace where parents are lured by standards of education which comes at a premium. In Mumbai, too, the situation is no different. “In Maharashtra, fees can be revised every two years and school can’t demand or collect any fee without taking approval as per the Act.
However, in the past five years, there has been a 30% to 400% increase in fee in private schools. In some schools, the fee has risen from ₹40,000 to more than ₹2 lakh and the government has failed to regulate it,” said Anubha Shrivastava Sahai, president, India Wide Parents Association and advocate at Bombay high court.
Steep childcare and education costs often compel millennial parents to have a single child. “Earlier, schools were run by charitable trusts with the intent to offer service to the society, but today schools are run purely for profit. There is a section of parents who equate costs with good education. However, most parents also don’t have the option to send their children to schools with reasonable fees because of the limited seats. Education cost is acting like a birth control pill where millennial couples are now forced to opt for a single child,” says Ashish Naredi, executive member, Hyderabad School Parent’s Association.
ASPIRATION VS REALITY
Schools have now become aspiration and a status symbol, pushing millennial parents towards debt. “Most millennial parents are disconnected with reality. The attitude of giving the best of the best to kids leads to debt and credit card defaults. You have to consider the right choices and be practical. You can always delay gratification and focus on other
important needs,” says Suresh Sadagopan, founder, Ladder7 Financial Advisories. Millennial parents are in a rat race and don’t want to miss out on certain kind of aspirational lifestyle as well, say experts. “If you the compare cost to “baby-boomers”, it will only give heartburns, as things have changed drastically over the last 15 years, in terms of access, options and price points. In a metro, the total cost of a kid’s education, from primary to graduation, will be around ₹50 lakh, which is huge,” says Manoj Chahar, founder, Moneyfrog, an online financial planning platform.
The healthcare cost of a child is unavoidable, but it can be managed with medical insurance. However, there is no alternative to education. One should select a school keeping in mind situations wherein if one of the partners drops out of employment for a certain period or takes a home loan, the family should not be in a state of crisis. Moreover, experts feel parents should start a conversation with kids about expenses to make them realise the importance of financial independence. “A child accustomed to a certain lifestyle may find it difficult to manage on his own. It is better to bring in discipline from early years,” adds Sadagopan. It’s important to prepare the child so that they are able to take care of their long term needs.