Thirty-seven percent of U.S. parents say their children’s education is more important than their own retirement savings, according to a survey by HSBC Group.
Sixty percent of U.S. parents would go into debt to fund their child’s college education, and 58% say that, while the expense makes it more difficult to keep up with other financial commitments, it is more important. In fact, 40% say it is more important than long-term savings and credit card repayment (37%), as well as retirement savings (37%).
Among U.S. parents under the age of 34, 74% would consider borrowing for a child’s education, compared with 56% of those over 35. Ninety-eight percent of U.S. parents are considering a college education for their child.
American parents spend an average of $14,678 a year to fund a child’s education, nearly double the world average of $7,631. Although this number is seemingly high, students in the U.S. pay 37% of the college bills, one of the highest contribution rates in the world.
“The financial sacrifices that parents are willing to make to fund their children’s education are proof of the unquestioning support they will give to help them achieve their ambitions,” says Charlie Nunn, HSBC Group’s global head of wealth management. “However, parents need to make sure this financial investment is not made to the detriment of their own future well being. By having a financial plan to meet their family’s overall needs and reviewing it regularly, parents will be better placed to support their children’s studies without compromising on their own long-term financial goals.”
HSBC Group surveyed more than 6,200 parents in 15 countries.