Many parents failing to think ahead on college fees
Saving from child's birth costs just HK$2,433 a month
A third of parents start making financial plans for their children's education only a year before they start college, an HSBC survey reveals.
Despite Hong Kong's reputation as a city where education is king, parents, while aspiring to give their children the best possible schooling, are not putting their money where their mouths are, it shows.
Of the 371 people with dependent children among the 600 married people surveyed, 33 per cent make financial plans just one year ahead, 32 per cent plan 10 or more years ahead, while 10 per cent plan less than two years ahead.
Such procrastination can be expensive. The survey shows parents who save for their child's university degree from its birth only need to put aside HK$2,433 a month. But if they wait until the child is 15, they need to save HK$14,705 a month.
'The more they wait, the more difficult it is to achieve their goal, assuming the couple need HK$1 million for their child's university degree at the age of 19 or 20,' Bruno Lee, the bank's head of personal finance wealth management for Asia Pacific, said.
'More than 70 per cent of couples feel they are less than half-prepared for their children's future,' he added, with just 44 per cent having already invested in an education fund for their children.
Another banking institution in Hong Kong is currently running advertisements stating it costs HK$4 million to raise a child.
The survey also found that even in these times of perceived gender equality, the man is still considered the breadwinner and head of the household - even if his wife earns the same or more than him.
Of those surveyed, 77 per cent felt the husband should take on all household expenditure, even if the wife has a similar earning ability, and 90 per cent of husbands paid for 50 to 100 per cent of household expenses.
But it is the wife who controls the purse strings in the home, the survey shows.
More than half - 51 per cent - of the respondents said the wife was the financial controller within the home, compared with 43 per cent who said the husband ran the show.
With all the commitments of bringing up their children and saving for their education, and taking care of elderly in-laws and relatives, couples find themselves with little savings for their own retirement and future, Mr Lee said.
Thirty-six per cent of respondents had not even thought about retirement plans, he said.