KUALA LUMPUR: More than 50 percent of Malaysian parents are willing to go into debt to fund their child’s education, while 80 percent are funding their child’s education from day-to-day income, a HSBC survey revealed.
HSBC Bank Malaysia Bhd Retail Banking and Wealth Management Country Head Lim Eng Seong said 92 percent of local parents were funding their child’s education and willing to make sacrifices and risk their own financial security, compared to 60 percent at the global level.
“Many parents think that funding a child’s education is more important than their other financial commitments like credit card repayment, insurance and contribution to retirement savings,” he said after releasing ‘Foundations for the Future’, the latest report in HSBC’s ‘The Value of Education’ series.
Lim said the percentage of allocation that should be set aside was between 10 percent and 15 percent of the salary.
“As an example, on a salary of RM5,000 per month, a parent should set aside 10 per cent or 15 per cent solely for education, apart from other expenses such as petrol and income tax,” he added.
The survey also revealed that Malaysian parents spend about 14 percent higher or US$8,720 each year towards their child’s university education than the global average of US$7,631.
Lim also stressed that it was crucial for parents to start their financial planning early and consult banks due to the uncertain global situation.
“For instance, the pound sterling has depreciated to around the 5.4 level against the ringgit as compared to 6.5 level two weeks ago, so parents have to start meeting financial planners as they are not only paying for study fees, but also food, books, local travel and transport as well as technology devices,” he added.
The survey was conducted in 15 countries including Malaysia, with the participation of 6,200 parents. – BERNAMA