SIP Calculator - How ₹15,000 Monthly Can Fund Your MBA in a Decade?

Pursuing an MBA is a long-term goal that requires both academic preparation and financial planning. With tuition fees and associated expenses rising every year, it’s essential to start planning early, especially if you intend to self-fund your education. 

Whether you’re eyeing a premier B-school in India or an international university, the cost of an MBA can range from ₹10 lakh to over ₹50 lakh, depending on the institution and location. Fortunately, a disciplined investment strategy like a Systematic Investment Plan (SIP) can help you accumulate the required amount without financial strain.

Estimating the Future Cost of an MBA

The first step in planning is to estimate how much your MBA would cost 10 years from now. Let’s assume the current cost of a full-time MBA program is around ₹20 lakh. If we account for education inflation at an average rate of 6% per year, the cost would rise significantly over a decade. Using the formula for future value, the estimated cost in 10 years would be ~₹35.8 lakh. This figure becomes your target corpus.

Planning to save such a large amount can feel overwhelming, but starting early works in your favour. A SIP, which involves investing a fixed amount regularly in mutual funds, leverages the power of compounding and rupee-cost averaging over the long term.

Using a SIP Calculator to Plan Monthly Savings

Once you know the target amount, ~₹35 lakh in this case, you can use a SIP calculator to determine the monthly investment required.

Assuming a return of 12% per annum, over a 10-year horizon, the SIP calculator indicates that you would need to invest ~₹15,000 per month to reach your goal. This amount may seem high at first, but when spread over a decade, it becomes manageable, especially if you start early in your career or as soon as you begin earning.

The beauty of using a SIP calculator is that it gives you a realistic view of what’s achievable within your time frame. You can adjust the inputs based on your current financial capacity. For instance, if you can only afford ₹10,000 a month now, the calculator will show you the extended time it may take, or the need for a higher return. Alternatively, you can explore increasing your SIP amount gradually over time as your income grows.

Staying on Track with Regular Reviews

Consistency is crucial when it comes to SIPs. Over the 10-year period, you should aim to invest every month without fail. At the same time, it’s important to review your progress once or twice a year.

Also Read: SIP Calculator: Start with ₹17,000 a Month for 25 Years - See How It Can Grow?

Conclusion

An MBA is a significant investment, but with a clear savings goal and the disciplined use of SIPs, it is entirely achievable. By estimating future costs, using SIP calculators for accurate planning, and staying consistent with your investments, you can build the corpus required without taking on excessive debt.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.