KUALA LUMPUR: More than 50% of Malaysian parents are willing to go into debt to fund their child's education, on top of the fact that 80% of them 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% of local parents were funding their child's education.
He added they were willing to make sacrifices and risk their own financial security as compared to 60% at the global level.
"Many parents think that funding a child's education is more important than their other fiancial commitments like credit card repayment, insurance and contribution to retirement savings," he said.
He was speaking to reporters after releasing the Foundations for the Future, the latest report in HSBC's "The Value of Education" series.
Asked on allocation for education, Lim said the percentage of allocation that should be set aside should be 10% and 15% of the salary.
"As an example, on a salary of RM5,000 per month, a parent should set aside 10% or 15% solely for education, apart from other expenses such as petrol and income tax," he added.
The survey revealed Malaysian parents spend more than 14% or US$8,720 each year for their child's university education compared with the global average of US$7,631.
Lim advised parents to start 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
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