Should I plan for my child’s PG education costs in addition to UG?

Published: May 25, 2021 at 10:01 am

I received this question from a reader who prefers anonymity. “Dear Pattu sir, I recently became a parent and started investing for my son’s college education expenses (UG). I am debating whether to include post-graduation (PG) costs into my goal. I did my MBA with an education loan. The fear of completing that loan made me financially responsible from the day I got my first salary. I am thinking of doing the same for my son. Am I thinking along the right lines?”

I had a couple of questions before I could answer: (1) Did you get an education loan because your father could not afford the PG fee or because your father wanted you to learn responsibility? Answer: His father could not afford the fee. (2) Do you think you will be able to afford the PG fee for your child? Answer: I think so. My son has just turned one now. I should be able to pull it off.

We are all victims of our good and bad experiences. We tend to believe what happened to us made us better and therefore that is the right path for our children. My transition from school to employee will therefore heavily influence my opinion on this matter. This question cannot be answered using data and analysis. I was asked for my opinion and this is it. Your experience and therefore your opinion may differ.

I had once written an article titled What if our children never had to work! As usual, many read only the title before criticising my view and among those who read it very few understood what I wanted to say. I recall this here because it is a closely related topic.

Before we begin, let us eliminate the obvious possibility. If we cannot afford to pay the PG fee (even after investing regularly, early and right) then the choice is obvious. IF the kid wants to study further an education loan is the only choice. We are not discussing this here.  Mr anonymous is considering an education loan even if he can afford to pay PG fees. Also, this depends on what the child wants to do after college.


As mentioned above, I am a victim of my good experience and I think it is worth share it here. I finished school in 1992. I got my first salary as a proper employee only in Feb 2006. My parents were lower-mid to mid-level government employees. Their pay was enough to make ends meet but not pay for fancy college fees.

Even though the IIT Madras MSc fee was (relatively) less than an Engineering fee, they had trouble sourcing it. My dad retired when I start my PhD. Even after two short stints abroad, I could only compensate for the airfare and other sundry expenses. Meaning I had nothing left, so did they! The stipend I got as a research fellow was spent entirely on my commute.

During all this time, my parents were a solid source of support. If I had started earning earlier, I could have made a difference to our finances but they were adamant that I finish my PhD, finish my post-doctoral experience and get a proper job. This cushion of money and time they constantly provided me for 14 years after school is the only reason I am what I am today.

If my parents could do it with barely any networth to speak of, it would be criminal if I with much better finances (because of their sacrifices) do not do the same for my son. This is what I meant in the above article. Provide our children not just money for fees but also time. Of course, there two are not strictly independent. Time requires money!

Time to find their calling, time to find themselves. Time to establish themselves as independent professional. Time to establish themselves as entrepreneurs. Time to hone their creativity.

Many of us make the mistake of assuming the child will be a salaried employee in future while planning for their future. We almost take this for granted. If the child is super clear about what she wants to do, then there is no issue. What if the child does not know what to do?

Do we push them into the usual “safe” route of BE + MBA? Or do we give them time, at least a year after school to figure themselves out? This is where our own networth makes a difference.

I often meet extremes among the students seeking career advice. They want to start PhDs when their parents are retiring or they want to start working after a BE even if there is no hurry for them to work and the parents are fairly well off.

I strongly believe that if we can afford it, we must not only pay for PG fees but also give the child time to find themselves. This process should start at a very early age.

Jack Ma (chairman Alibaba group) says we must work happily and live seriously. As parents, I believe we must do everything possible to ensure our children work happily and live seriously. An education loan is not necessary to teach a child responsibility or financial prudence. Then are plenty of other ways to do that.

Do share if you found this useful

Use our Robo-advisory Excel Template for a start-to-finish financial plan! Now with a new demo video!  More than 640 investors and advisors use this!
Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 2525 investors and advisors are part of our exclusive Facebook Group! Get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free!  One-time payment! No recurring fees! Life-long access to videos in an exclusive Facebook Group! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course!  Increase your income by getting people to pay for your skills! More than 585 salaried employees, entrepreneurs and financial advisors are part of our exclusive Facebook Group! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts you and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos in an exclusive Facebook Group!   
My new book for kids: “Chinchu gets a superpower!” is now available!
Both boy and girl version covers of Chinchu gets a superpower
Both boy and girl version covers of Chinchu gets a superpower.
Most investor problems can be traced to a lack of informed decision making. We have all made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, if we had to groom one ability in our children that is key not only to money management and investing but for any aspect of life, what would it be? My answer: Sound Decision Making. So in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parent’s plan for it and teach him several key ideas of decision making and money management is the narrative. What readers say!
Feedback from a young reader after reading Chinchu gets a Superpower (small version)
Feedback from a young reader after reading Chinchu gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Did you know? We have more than 1000+ videos on YouTube to explore! Join our YouTube Community!

Want to check if the market is overvalued or undervalued? Use our market valuation tool (will work with any index!), or you buy the new Tactical Buy/Sell timing tool!
We publish mutual fund screeners and momentum, low volatility stock screeners .every month.
About the Author Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored three print books, You can be rich too with goal-based investing (CNBC TV18), Gamechanger, Chinchu Gets a Superpower! and seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation to promote unbiased, commission-free investment advice. He conducts free money management sessions for corporates and associations based on money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association, IIST Alumni Association. For speaking engagements, write to pattu [at] freefincal [dot] com
About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any paid articles, promotions, PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions, seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download)
Free android apps