For lots of couples a regular ‘date night’ provides a much-needed break. Spending time together – whether it’s dinner, dancing or a movie – can help keep the spark in a relationship alive.
But when it’s time for their children to go to university, some parents find that date night is a luxury they can no longer afford.
Supporting a child through higher education is a big burden to shoulder, as HSBC’s latest Value of Education research shows. More than half of parents providing financial support to a child at university told us that they cut back on leisure activities such as date night to help pay the bills.
A parent supporting a child’s university education contributes around USD16,000 over the course of a degree
Others said they take fewer holidays. And some look for ways to increase their income, such as working extra hours or taking on a second job.
It’s easy to see why parents are prepared to make these sacrifices. A good education can unlock doors throughout life – helping young people find a job, build a career and provide for their families. And in today’s competitive labour market, a university degree is an essential requirement for many major employers.
But the costs of a degree soon add up. On top of tuition fees and accommodation, students need to pay for food and utilities, clothes and textbooks. Electronic devices such as laptops and smartphones are also vital, but expensive, aids to study.
The price of success
This means there is often a big gap between the amount of money parents can provide and the amount that students need. Based on the international averages revealed in our research, a parent supporting a child’s university education contributes around USD16,000 over the course of a degree. But the average student spends more than USD35,000.
The gap is larger in countries including Australia, the UK and Canada. It is highest in the US, with a difference of more than USD80,000.
Students often take out loans to fill this gap, but some parents may feel uneasy about their child incurring large debts at a young age. Some students work part-time. This can be a valuable experience, but if they end up spending more time working than studying, they may struggle to get the maximum value out of their degree.
So what can parents do? While there is no easy solution for those whose child is already at university, there are a number of steps that parents of younger children can take.
First, it pays to start planning early. Professional advice may help parents set and stick to long-term goals for their savings and investments. Adopting a structured approach to saving, even for a couple of years, can make a difference.
Second, it’s important to be realistic about the likely costs of a university education. Parents can budget more effectively if they take into account accommodation and other living costs as well as tuition.
Third, parents can help children get into good financial habits by teaching them about the value of money from an early age. Pocket money and lessons in saving and earning could pay long-term dividends.
With the right preparation, parents can send their child off to university confident that they will be able to provide a good level of financial support. And who knows – they may even be able to save date night, too.