Future Expense

Take today's cost and compound it forward using an education-specific inflation rate — typically 8–10% in India, higher than general CPI. Future cost = present cost × (1 + education inflation rate)^years until the expense.

Different categories inflate at different speeds — education and healthcare have historically run 8–12%, general lifestyle costs closer to 5–6%, and everyday CPI around 4–6%. Using one blanket inflation rate for every expense type will understate costs for the fastest-inflating categories.

Future Value = Present Value × (1 + inflation rate)^number of years. For example, a ₹10L expense today at 8% inflation over 10 years becomes roughly ₹21.6L — more than double, which is why one-time future expenses are easy to under-budget for.

For a 3-year horizon, capital protection generally matters more than growth, since there's limited time to recover from a market downturn. Debt funds, FDs, or a conservative hybrid allocation are typically safer than equity SIPs for expenses this close.

Healthcare costs in India have historically risen faster than general CPI, often in the 10–14% range for treatment and insurance premiums, driven by rising treatment costs and medical technology. Planning healthcare-related future expenses using general inflation figures typically understates the real cost significantly.