Your children’s Ang Baos – save or spend?

Yet another season of cherry blossoms, pineapple tarts and plenty of ang baos (otherwise known as red packets) has come and gone again.

For singles and children, collecting ang baos is a time-honoured tradition of the Lunar New Year and probably the highlight of the season (because who doesn’t like free money?). But along with the excitement of opening the money packets and counting your spoils, it’s also an invaluable opportunity to cultivate a healthy relationship with money. 

Of course, inculcating good values towards saving money should be a sustained, long-term process – especially with children whose eyes and ears are always open to listen and learn. But if you haven’t started yet, Chinese New Year is an opportune time to bring up the issue of good ways of handling that pile of ang bao money. Here’re some things we think you should consider doing with your child: 

1. Count the money together

Let your child actually handle the money as you explain its uses – that it can be a tool of good and the not-so good. Tell them that the money belongs to them. Often, younger children think of cash and credit cards as “those bits of paper and plastic” in your wallet that are seemingly in endless supply.

Explain to your child as simply as possible that money is precious, can be used to trade for nice things but also to pay bills (for say, internet and mobile phone – pick the ones they can relate to) and that you have to work to earn it. If your child is not familiar with the different types of denominations and which are of higher value than others, now’s a good time too.

Why do this?

It’s to get them into the habit of being savvy, independent  and familiar with money. Otherwise, your children would see you as their personal ATM for a very, very long time. 

2. Divide the money and identify different uses for it

A habit of saving cannot be encouraged by taking the entire ang bao collection away to the bank without your child having an experience of it. This merely means that you’re doing the saving for them.

Involve them in the process so they feel responsible for their own little pot of money. Also, set aside a reasonable amount for your child to enjoy and talk about what they’d like to do with that (limited) amount of cash.

Why do this?

Taking away all your child’s ang bao money – even to put in a savings account for them – may breed apathy and resentment. Your child might come to think of you as the big , bad person who takes away their money.

Instead, talk about the concept of spending and take time to bring them to the bank to explain that most of their ang bao money is being put aside in a safe place to accumulate and grow.

Once you’ve decided on a sum to allocate for spending, talk to your child about their options. They might want a terribly expensive toy or to buy tickets to Universal Studios. If the amount is insufficient, you can encourage them to either save up for it or pick another toy or activity that meets their budget. This will teach them the value of money and also the notion of delayed gratification. 

3. Consider letting your child donate part of his ang baos

All festive seasons are a good occasion to reflect on the blessings we have and to be thankful for the anxieties in life that we’re lucky enough not to have to suffer through. There are many organisations that accept donations for the less fortunate during festive occasions and you can pick one for your child to contribute to.

Why do this?

It’s not just that this is a kind thing to do. Part of knowing the value of money also lies in the realisation that there are many segments of society that get by (or have to make do) with so much less than what we have.

If your children are constantly demanding toys and expensive fun and taking them for granted, this is a good way of acquainting them with the less-fortunate as well as cultivating positive values such as responsibility and contribution to society – two good things that money can be used for.

With your guidance, your children will grow up to be sensible and savvy with their money choices. May good luck, abundance and prosperity shine upon you and your loved ones in this coming Year of the Monkey!

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