Financial concerns of parents with children studying abroad

MANILA, Philippines - According to a survey conducted by HSBC recently, affluent Asians with children studying abroad are most worried about how their children will cope financially away from home. The top five concerns that parents have about their children studying overseas are: health and safety, insufficient money to meet regular needs, access to full medical coverage, timely financial support for emergency situations, and overspending

“Setting children up for success overseas also involves planning for their financial security and independence. Most times, families focus on preparing themselves emotionally to deal with the separation. Ensuring that children are financially prepared to deal with every day needs as well as unexpected situations will give parents peace of mind,” says Annette Tirol, senior vice president and head of Retail Banking and Wealth Management, HSBC. “Aside from saving for tuition fees, parents need to set aside additional funds to cover monthly living expenses and emergency situations. Our survey shows that Australia remains the top education destination followed by Singapore, the UK and the US. Parents have also shown interest in new markets like China, Japan and Hong Kong. Regardless of where children decide to study, parents will need to prepare adequate financial buffers and more importantly equip their children with the financial tools that will allow easy access to and management of their transactions and funds day-to-day.”

HSBC’s survey also points to the most important financial needs for parents with children studying overseas: the ability to make fast and efficient fund transfers; access to an international network; pre-departure account opening and emergency services including insurance and emergency cash.

HSBC’s global wealth management solution, Premier, recognises that the growing demand for international studies will impact the way Asian families save and manage their finances.

HSBC Premier provides a range of international banking products and services as well as online tools to help families with overseas educational needs and ambitions prepare for the financial challenges ahead. The following checklist will help ensure that children are financially set up when they start a new school life abroad.

• Bank account. Your child will need a savings or current account that is accessible via a branch, ATMs or online banking. HSBC Premier can help you set up an account prior to departure. With HSBC Premier’s Global View, accountholders get instant online access to all their accounts all over the world using a single log-on.

• Fund transfers. Make sure you are familiar with how you can efficiently transfer funds to your children’s accounts regularly to ensure they have enough money for their every day needs. Through HSBC Premier’s Global Transfer, you can enjoy real time money transfers at zero fees and can set up standing instructions that automatically transfer a pre-determined amount every month from your account to your children’s accounts for free. Or you can transfer money anytime through Premier’s online banking service or 24-hour phone banking.

• Insurance. Prior to departure, ensure that your children have adequate life and accident insurance and more importantly a comprehensive health and medical plan. Make a separate checklist of numbers to call in case they need to seek medical treatment abroad – the nearest hospital or clinic, the school doctor, as well as the insurance company hotline.

• Credit and debit cards. Credit and debit cards provide your children with access to funds for both big and small purchases. A supplementary credit card enables parents to monitor expenses while extending flexibility in terms of spending limits for emergency cases. A debit card takes money directly from the account and is also a good way for children to learn to control spending.

• Emergency services. Check the scope of emergency services your bank provides. This can range from emergency cash services to next-day card replacement.

• Savings. There are opportunities for your children to earn allowances by doing part time work as part of their academic and extra curricular activities. Instilling the discipline of setting aside regular sums highlights the value of money and financial priorities. Ask your bank about savings plans and wealth management options accessible to you and your children while abroad to start them saving young.