South China Morning Post
Comment›Insight & Opinion
Kevin Martin says a survey showing a hands-on approach to parenting and willingness to invest in education underlines the need for financial planning so that funds don’t fall short
Parents in fast-growing economies, especially in Asia, have strong opinions on what their children should study and are keen to get involved, but paying for a good education can put a strain on family finances, a survey of parents in 16 countries and territories around the world has found.
Parents in Asia told us they have clear ideas about what career paths are best for their child. More than nine in 10 parents in mainland China, Indonesia and Malaysia have a specific occupation in mind. Medicine is the top choice globally, but parents in India want their children to consider careers in computer science, perhaps reflecting its importance to the national economy.
Many parents want their children’s university education to equip them with knowledge of the business world: on the mainland and in Hong Kong, Taiwan and Singapore, parents’ preferred degree subject is business, management and finance.
Western parents primarily want their child to choose a path that suits their own preferences and skills, while parents in Asia are more likely to focus on the realities of what is needed to succeed in a competitive work environment.
They are not wholly focused on income-earning potential, however. Parents in Asia are also likelier to say that they want their child to do work that benefits society. And they place a high value on formal academic education to meet these long-term goals. About 90 per cent of parents in mainland China, Indonesia, Malaysia, India and Singapore think an undergraduate or higher degree is necessary for their child to achieve important life goals, compared with fewer than half of the parents surveyed in Australia, Canada and Britain.
Parents in Asia are prepared to get involved in a very practical way to give their child the right opportunities. More than half of parents in Britain and Australia do not seek any guidance about their children’s university education, but more than four in five parents on the mainland and in Indonesia, Malaysia and India do – whether that be consulting friends, teachers or websites.
Parents in Asia are also the likeliest to encourage their children to consider spending time studying abroad, despite the extra cost and distance involved.
Most parents provide financial support for their child’s university education. In some cases, grandparents also pitch in. More than two in five parents in mainland China with a child currently at university say grandparents are helping or expected to help meet the costs. On top of university fees and living costs, most parents in Asia are also prepared to invest in extra tuition.
These findings are testament to how much parents are prepared to do to give the next generation the best possible start in adult life.
But paying for education can be costly. The report shows that while most parents hope to be able to save enough to be able to provide support, many of those with older children find that they have not been able to save as much as they need. So they take out loans or place pressure on their day-to-day income. The advice is clear: put in place a long-term savings plan and stick to it.
This is particularly important for those considering overseas study. A separate study conducted last year suggested that the average international student would need more than US$30,000 for each year of study in the US or Britain – the world’s two most popular destinations.
Parents can also help ensure that young people become financially independent by teaching them to manage their own money from an early age. With money, the best way to look after your children is to give them support but also the freedom of independence.
Kevin Martin is regional head of retail banking and wealth management, Asia-Pacific, HSBC