Parenting inflation: Why raising children has become more expensive than ever

Expenses now rise at every stage of a child’s growth. Beyond school fees, families are budgeting for coaching, sports classes, music or dance lessons, gadgets, online learning apps, summer camps, school trips, birthday celebrations and healthcare. No single expense looks huge on its own, but added together, raising a child has become one of the largest financial outlays for most families.

Financial planners now have a term for this – parenting inflation. It does not just mean general inflation. It refers to the steady rise in the total cost of raising a child, driven both by rising prices and by changing needs and expectations.

Parenting inflation: What the data shows

According to the National Statistical Office’s (NSO) Comprehensive Modular Survey on Education 2025, families in urban India spend an average of Rs 23,470 a year on a child’s schooling. This figure rises steadily as the child moves to higher grades, from around Rs 18,943 a year at the pre-primary level, to about Rs 29,286 a year by the higher secondary stage.

This is a national average, and it likely understates the real cost for many families. The survey covered 52,085 households between April and June 2025, spanning government schools, low-fee private schools, and expensive city schools. About 30% of respondents sent their children to government schools, which pulls the average down. Middle-class and upper-middle-class families in major cities typically spend far more.

In cities like Delhi, Mumbai, Bengaluru, Hyderabad, and Pune, annual fees at good private schools usually range from Rs 1.2 lakh to Rs 3.5 lakh. At premium IB and day-boarding schools, this can reach Rs 5 lakh to Rs 9 lakh a year, and that excludes coaching, transport, gadgets, hobby classes and other costs.

The cost has moved well beyond school fees

Even 15-20 years ago, raising a child mainly meant paying for school fees, books, uniforms, and medical treatment. Today, children’s needs have changed, and so have parents’ expectations. Most parents now want their children to do well not just academically, but in sports, music, technology, and languages too. As a result, family expenses are no longer limited to school alone.

Hrishikesh Palve, Director at Anand Rathi Wealth Limited, says, “Raising a child in urban India has quietly become one of the biggest financial commitments a family can make. Many parents don’t realize the scale of it until they’re living it. Between school fees, healthcare, extracurricular activities, gadgets, and everyday expenses, the costs keep adding up. Depending on the city and the lifestyle a family chooses, bringing a child up to adulthood can easily cost over Rs 1 crore.”

Education costs are rising faster than general inflation

General inflation has averaged around 5-6% over the past several years, but education costs have climbed much faster.

Palve says, “One of the biggest reasons why parenting feels so much more expensive today is education. While overall inflation has stayed around 5-6%, education costs have been rising at nearly 10-12% every year. At that pace, school and college expenses can almost double in just six or seven years, making it harder for families to keep up if they haven’t planned ahead.”

This is why school fees that seem affordable today can nearly double within a few years, putting real pressure on family budgets if parents haven’t planned ahead.

Dozens of new expenses now sit alongside school fees

Ask most parents what their biggest expense is, and they will name school fees. But fees are now only part of the total cost. School bus or cab fare, books, uniforms, stationery, projects, and school trips add to the budget every year, and coaching and hobby classes follow soon after.

According to the NSO survey, an urban Indian family spends an average of Rs 23,470 a year on a child’s school education. Course fees make up the largest share at Rs 15,143, followed by Rs 3,082 on transport, Rs 2,867 on books and stationery, and Rs 1,540 on uniforms. This means thousands of rupees are spent every year beyond school fees, costs that many parents don’t fully account for while planning.

Many families are also enrolling children in sports, music, dance, swimming, robotics, AI & machine learning and foreign language classes. Online learning platforms, educational apps, and digital devices have become part of a child’s education too, and these gradually turn into a regular line in the monthly budget.

Palve says, “Parents today are thinking far beyond academics when it comes to raising their children. The focus has shifted towards building well-rounded skills and preparing them for a future that’s changing faster than ever. As a result, family budgets now stretch well beyond school fees.”

He adds, “Many parents invest in sports coaching, music lessons, coding classes, robotics workshops, language programs, and hobby-based learning to help their children discover new interests and build practical skills. Technology is part of the mix too, with spending on educational apps, online learning subscriptions, and digital devices becoming increasingly common.”

According to Palve, the expenses don’t end there. “The spending doesn’t stop there. Competitions, specialized camps, and enrichment programs often involve travel and other related costs that weren’t part of the average family budget a generation ago. Each expense may seem manageable on its own, but together they can add up much faster than many parents expect.”

The rising cost of raising children isn’t only about inflation. A big part of it is simply that the list of things considered essential for a child has grown much longer.

As children grow older, costs grow faster

The cost of raising a child doesn’t stay flat. As a child moves to the next grade, the family budget rises too, and what looks manageable in the early years can grow sharply within a few years.

According to the NSO survey, urban families spend an average of Rs 18,943 a year on education at the pre-primary level. This rises to Rs 21,372 at the primary level, Rs 24,129 at the middle school level, Rs 25,774 at the secondary level, and Rs 29,286 at the higher secondary level.

These figures cover school costs alone. In practice, as children move into higher grades, spending on competitive exam preparation, additional coaching, and career preparation rises quickly too. The survey reflects this: around 31% of students in urban India take some form of private coaching, rising to about 40% at the secondary level and about 45% at the higher secondary level. Coaching costs rise in step, from an average of Rs 16,415 a year at the secondary level to Rs 22,394 a year at the higher secondary level.

By the time a child nears college, parents are managing significant costs not just for school fees, but for coaching and career preparation as well.

Small expenses add up to a large burden

Parents usually plan for the big, obvious costs, hospital bills, vaccinations, and school fees. But many smaller expenses gradually become part of the family budget and add up to a significant impact over time.

Palve says, “Inflation is one of the biggest reasons why the cost of raising a child feels far higher than most parents expect. Expenses don’t stay the same year after year. As children grow, prices go up, needs change, and families often end up spending more than they had originally planned.”

He adds, “Most parents are prepared for the obvious costs like hospital bills, vaccinations, and school fees. What tends to slip under the radar are the lifestyle expenses that gradually become part of everyday life. A new baby can make it feel like the right time to move into a bigger home, buy a larger car, or spend more on premium baby products, even when those upgrades aren’t immediately necessary.”

“When rising prices and lifestyle upgrades come together, they can quietly put pressure on a family’s finances,” he says.

A child’s expenses rarely stay limited to the child alone. Often, the whole family’s lifestyle shifts alongside it, a bigger house, a bigger car, a better neighbourhood, more amenities, all steadily adding to the family’s total spending.

Start planning as early as possible

Rising costs don’t have to mean the same financial burden for every family. The real difference lies in when planning begins. A family that starts saving only after the child is born has less time to grow its investments. Starting earlier, even with small, regular savings, gives compounding more time to build a substantial corpus. This is why financial planners now recommend starting to plan for a child’s education years before school admission, not at the time of admission itself.

Palve says, “Don’t wait for your child to be born before you start planning for their education. Time is one of the biggest advantages you have. The earlier you begin, the more room your investments have to grow, and the less overwhelming future expenses are likely to feel.”

“If you’re planning to have a child in the next few years, that’s the perfect time to start. Build an emergency fund, make sure your health insurance is adequate, and begin investing for your child’s future. Starting even three years early gives compounding a head start and helps you prepare for maternity and delivery expenses without putting pressure on your finances,” he says.

Investing should continue after the child arrives too. Palve says, “Once your child arrives, the focus naturally shifts to managing everyday costs. Hospital visits, vaccinations, childcare, school admissions, and other routine expenses become part of life. Besides these, it’s a good idea to start investing regularly towards higher education. You don’t need a huge amount to begin with. A disciplined monthly SIP in equity mutual funds can go a long way over the next 10 to 15 years.”

Don’t let savings shrink as children grow

It’s common for families to cut back on savings as a child’s expenses rise. Experts consider this a mistake. As the number of children in a family grows, education and everyday costs naturally take up a larger share of the budget, which is why families should review their spending every few years rather than let it eat into long-term savings.

Palve says, “One thing stands out from this framework. As the number of children increases, education and lifestyle costs naturally claim a larger share of the budget. Instead of letting those expenses eat into long-term savings, it often makes more sense to review your spending regularly and make small adjustments along the way.”

He suggests setting aside a dedicated share of monthly income for education, 10-20% for one child, and 20-30% for families with two or more children, depending on income and needs.

What counts as “good parenting” has also changed

Raising children hasn’t become expensive only because prices have gone up. A big part of the shift is that the idea of “good parenting” itself has changed. A few decades ago, a child’s entertainment meant a visit to the park, playing with neighbourhood friends, or spending time with relatives. Today, in many families, this has given way to indoor play zones, activity centres, weekend workshops, and summer camps, expenses that were once occasional and are now part of the monthly routine.

Palve says, “One of the most overlooked parenting expenses today is the cost of creating experiences for children. Growing up, entertainment was usually simple. A trip to the park, an evening of cycling, visiting cousins, or playing outside was often enough. Parents spent more time than money.”

He adds, “Today, things have changed. With packed schedules and fewer opportunities for unstructured play, many families turn to indoor play zones, amusement parks, activity centres, weekend workshops, and other paid experiences to keep children engaged. What used to be an occasional treat has slowly become part of the monthly routine for many households.”

Parents today are spending not just on education, but on experiences, new skills, and broader exposure for their children. This is a big reason the overall cost of raising a child has risen faster than in the past.

Why the pressure is felt even as incomes rise

Many families earn more today than they did in the past, yet still find raising children more expensive than before. That’s because costs haven’t risen from inflation alone, entirely new categories of spending have emerged. Alongside school fees, coaching, digital devices, hobby classes, travel, healthcare, and experiences are all steadily adding up. As a result, even with higher incomes, saving isn’t as easy as it used to be.

Conclusion: Raising children is no longer just a story of inflation

The rising cost of raising a child isn’t only about things becoming more expensive. What has really changed is that children’s needs, parents’ expectations, and society’s expectations have all shifted together.

A child’s education today isn’t limited to school. Families are also spending on coaching, technology, skill development, sports, hobbies, healthcare, and experiences, which is why “parenting inflation” is becoming one of the biggest budgeting challenges for urban families.

The sooner families plan for this, the less the impact will be felt. Because the cost of raising a child doesn’t rise overnight. It grows gradually, year after year, until it becomes the largest share of a family’s budget.

Disclaimer: This article is based on data from the National Statistical Office’s (NSO) Comprehensive Modular Survey on Education 2025, along with expert views. The survey figures represent national and urban averages across different income groups, school types and regions. Actual expenditure on raising a child can vary significantly depending on factors such as the city of residence, type of school, curriculum, coaching requirements, lifestyle choices and individual family circumstances.

The school fee ranges mentioned for Tier-1 cities are indicative estimates and may differ across institutions. The financial planning suggestions shared by the expert are general in nature and should not be treated as personalised investment advice. Readers should assess their own financial situation or consult a qualified financial adviser before making investment or budgeting decisions.

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