Select your country and language
  • English

How To Turn Your Child’s Ang Pao Into A Prosperous Future!

Teaching Kids About Money with Ang Paos - Great Eastern Life Malaysia

The tradition of gifting Ang Paos (red packets filled with money) during the Lunar New Year is a cherished practice, one that we all eagerly anticipate ever since we were children. These tokens symbolise good luck and blessings, yet they offer a unique opportunity to impart invaluable lessons in financial responsibility to children.

When receiving Ang Paos, parents can guide their children on the foundation of money management. Here are some teachings you may impart:

1. Teaching your children the significance of Ang Pao

Before diving into the 'serious' aspects of financial education, why not start by teaching your kids about the cultural and emotional significance of the Ang Pao? Convey that it’s more than just a red envelope filled with money that appears during Chinese New Year; it represents love, well wishes, prosperity, and blessings from family members and elders.

Understanding this is an initial step in teaching your kids about money. This perspective allows them to view these tokens as more than just money and appreciate the emotional significance behind them, which could make it easier for them to take on the responsibility of managing their finances.

2. Instilling the benefits of saving money

One common parental habit involves taking the ang pao from children, and reassuring them that “Mummy/Daddy will keep your money for you”. However, instead of having this impulse, consider seizing the opportunity to introduce your children to the concept of saving. It's a chance to discuss the importance of setting money aside for the future while also making wise decisions about how to spend it.

By having these conversations, you're helping them comprehend the value of money beyond its immediate use. They can learn to prioritise their needs, consider future goals, and understand the significance of saving for both short-term and long-term purposes. Encouraging them to think about how to grow their money fosters a mindset that appreciates financial security, independence, and the freedom to achieve their dreams.

3. Starting a savings account for your child

Speaking of savings, one of the most straightforward steps in teaching your child about money is to open a savings account for them. While they’d undoubtedly be thrilled about their treasure trove of red packets, the excitement magnifies with the introduction of financial independence through opening a new bank account that’s just for them.

Many banks offer accounts specifically catered for children, often with educational materials and incentives, premium goodies, and most importantly, a very attractive interest rate. These perks may help make the task of teaching financial literacy to younger children an easier task for parents. This doesn’t just keep their money safe, but it’s also a way to introduce them to how money can grow over time. It’s like planting a seed that gradually blossoms into something bigger – a practical way for them to begin their financial journey and witness the magic of their money growing little by little!

4. Introducing your child to investing

Investing involves putting money to grow over time, so instead of only helping your child save their Ang Pao money in savings accounts, give them the option to invest it instead. This allows for more significant growth compared to merely keeping their Ang Pao money in a piggy bank. The importance lies in building a financial cushion for the future, such as an education fund or buying a house.

One easy way to explain it to your children would be to picture it as planting seeds — the longer they grow, the larger the plants become. Likewise, the more extended your money stays in investments, the greater its potential for increase. A good way to educate your child about investing is by giving them their own money box and setting up a system where you’ll match their contribution to it with half of whatever amount they put in.

For older children who are ready for more advanced financial lessons, consider kickstarting their journey into the world of investing with simpler financial products like bonds or mutual funds with their Ang Pao money. Do note that if your child is below 18 years of age, they might need a parent or guardian to help them with the process.

To keep them interested and engaged in the long-term process, the goal is to spark their curiosity and build a foundation without overwhelming them with complex details. If your child is old enough to begin investing, consider incorporating regular discussions about their investments, tracking their progress together, and celebrating milestones. Encourage them to set personal financial goals and tie rewards to their achievements, making the process enjoyable and motivating. The emphasis should be on making it fun, age-appropriate, and instilling a sense of excitement about the potential growth of their money over time.

5. Encouraging them to enjoy their prosperity

While learning about saving and investing for their future is crucial, it's equally important to encourage your child to enjoy a portion of their Ang Pao money — with mummy and daddy’s guidance, of course.

Setting aside a fraction for personal use teaches them budgeting and thoughtful spending, nurturing a healthier approach to handling money within reasonable limits. Plus, seeing the proud smiles on their face as they make their first independent purchase can truly create a priceless memory for you!

Finally, as you help your kids build their financial foundation, consider giving them another gift — a long-term investment plan that lasts for generations. Think of it as an extra step toward securing their future, ensuring they're protected against unexpected life challenges.

Recommended articles
Workshops & Events
Back to top
Need help?
Calling in Malaysia
Calling from overseas
Customer Service Appointment Booking
Contact us
Make a claim
Find a Life Planning Advisor
Great Eastern Holdings Ltd | The Great Eastern Life Assurance Company Limited | Great Eastern General Insurance Ltd
Great Eastern Holdings Ltd | The Great Eastern Life Assurance Company Limited | Great Eastern General Insurance Ltd