Kabir and Jaya (an illustrative profile) live in Nashik. Kabir is 34, Jaya is 32, and their daughter has just turned three. Between them they take home ₹1.4 lakh a month. Every few months one of them says, "We must start saving for her college," and then the month's bills arrive and the thought fades.
The problem is not lack of intent. It is that "save for college" is a wish, not a goal. Nobody can tell whether ₹5,000 a month is too little, about right or more than enough, because nobody has put a number or a date on it. This chapter fixes that.
In this chapter
- The four things every goal needs before you can invest for it
- How to inflate today's cost to the year you will actually pay
- How to work out the monthly SIP a goal needs, and what a delay costs
- How to rank goals when the money does not stretch to all of them
Why a wish is not enough
A goal answers four questions: how much, by when, adjusted for what, and how important. Without these, you cannot choose an investment, because the right choice depends on the time available. You also cannot tell whether you are on track, because there is nothing to measure against.
Think of it like a train journey. "I want to travel" gets you nowhere. "Pune to Delhi, on 14 March, sleeper class" lets you book a ticket. Goals work the same way: the details turn intention into action.
Today's cost and the target date
Start with what the goal would cost if you paid for it today. For education, look up current fees, hostel and living costs for the kind of course you have in mind. For a home, check prices in the locality you want. A reasonable estimate is far better than none; you will refine it every year.
Where to look depends on the goal. For a course, use the fee page of two or three colleges of the kind you have in mind, plus hostel and living costs. For a home, use recent sale prices in the locality, not the builder's brochure. For a car, use the on-road price, not the showroom price. Write down the source next to the figure so next year's review can update it quickly.
Then fix the date. A three-year-old will typically begin an undergraduate course in about 15 years. A car upgrade might be three years away. The date does two jobs: it decides how much the cost will grow, and it decides which investments are suitable, which is the subject of the next chapter.
Inflate the cost to the year you pay
Prices rise every year and the rise compounds, so a goal 15 years away costs far more than its price tag today. The Money Basics chapter on inflation explains why; for goal planning you need only one formula: future cost = today's cost × (1 + inflation rate) raised to the number of years.
The rate you plug in should suit the goal. A planning assumption of 6% a year is common for general costs (headline CPI inflation was 5.54% in September 2026). Education fees have tended to outpace the general index, so many planners use 8 to 10% for education as a cautious assumption. How to choose and stress-test an inflation rate in more depth is covered in the retirement chapter on expenses; here the point is simply to use a different rate for each kind of goal.
| Goal | Cost today | Years away | Inflation assumed | Future cost |
|---|---|---|---|---|
| Car upgrade | ₹10 lakh | 3 | 6% | about ₹11.9 lakh |
| Home down payment | ₹20 lakh | 5 | 6% | about ₹26.8 lakh |
| Child's graduation | ₹20 lakh | 15 | 8% | about ₹63.4 lakh |
| Child's graduation (cautious) | ₹20 lakh | 15 | 10% | about ₹83.5 lakh |
Worked example: their daughter's graduation fund
Kabir and Jaya estimate that a good four-year undergraduate course costs about ₹20 lakh today, all-in. Assumptions: 8% education inflation, 15 years to go, and an assumed long-term return of 12% a year from a mostly equity portfolio. Returns are not guaranteed; this is a planning assumption.
- Inflate the cost: ₹20 lakh × 1.0815 = ₹20 lakh × 3.17 ≈ ₹63.4 lakh.
- Convert the return to a monthly rate: 12% a year compounds to about 0.95% a month.
- Find the SIP: a monthly SIP that grows to ₹63.4 lakh over 180 months at that rate works out to about ₹13,300 a month. In total they invest about ₹24 lakh; growth supplies the rest.
- Test a lower return: at 10% a year instead of 12%, the SIP needed rises to about ₹15,800.
- Test a delay: if they wait five years and start when their daughter is eight, the same ₹63.4 lakh in 10 years needs about ₹28,300 a month, more than double.
The last step is the most important lesson in goal planning. Starting late does not just add a few thousand rupees; it can double the monthly effort because compounding has less time to work.
| Scenario | SIP needed per month |
|---|---|
| Start now, 12% assumed return | about ₹13,300 |
| Start now, 10% assumed return | about ₹15,800 |
| Start now, 10% education inflation (₹83.5 lakh target), 12% return | about ₹17,600 |
| Start in 5 years, 12% assumed return | about ₹28,300 |
Set a priority
Few families can fully fund every goal at once. Sorting goals into three groups tells you what to protect when money is tight:
- Essential: goals that cannot easily be skipped or delayed, such as retirement and core education.
- Important: goals that matter but have some flexibility in date or size, such as buying a home or a child's postgraduate study.
- Aspirational: nice to have, such as a holiday home or a foreign trip every year.
Retirement belongs in the essential group even for young parents. Children can borrow for education; nobody lends you money to retire.
Common mistakes to avoid
- Planning in today's rupees. A ₹20 lakh target for a goal 15 years away will fall short by more than two-thirds at 8% inflation.
- Using one inflation rate for everything. Education and health usually rise faster than groceries, so a single 6% figure understates them.
- Assuming a high return to make the SIP look affordable. Plan at a modest rate; if markets do better, you finish early.
- Keeping every goal in one pot. You cannot tell whether each goal is on track if the money is mixed together.
- Waiting for a "better time" to start. As the example shows, a five-year delay can double the monthly amount.
Try this yourself: Take ten minutes and make a one-page goal sheet with six columns: goal, today's cost, target year, inflation rate, future cost and priority. Fill in your top three goals. Then use the free Money n Wealth planner or the calculators on the tools page to find the SIP each one needs at a modest return assumption.
Frequently asked questions
How do I put a price on a goal I have never researched?
Start with a rough range from two or three real sources, such as college fee pages or recent flat prices in the area, and take the higher end. A reasonable estimate today is far more useful than a perfect one later, and you will refine it at every annual review.
How do I calculate how much SIP I need for a goal?
First inflate today's cost to the target year to get the future amount. Then use an SIP calculator with that amount, the number of years and a modest assumed return. Redo the calculation every year with actual figures.
What if my goal changes after I start investing for it?
That is normal, especially for children's goals. Keep investing for the best current estimate, and re-price the goal when the picture changes: the money already invested is not wasted, because it simply moves to the revised target or to another goal with a similar horizon.
What if I cannot afford the full SIP for every goal?
Start with what you can for essential goals, then use yearly step-ups as income grows, or adjust the date or size of flexible goals. The last chapter of this module works through exactly this situation.
If compounding and inflation are new to you, the Money Basics module explains both from scratch, and the complete guide to financial planning shows where goals fit into the bigger picture.