If you are young and unmarried, you’re guaranteed a small windfall at the start of each year in the form of Lunar New Year red packets or hongbao that married relatives and elders gift to you.
While it’s normal to feel like splurging, you can do more with your newfound hongbao riches. Here are a few ways to make your money last longer and help you with your future financial goals:
Assess Your Savings and Shortfalls
Firstly, look at your income and outgoings and take stock of all the funds you have — even if it is all stored in a tin under the bed.
Taking stock does not just mean noting how much money you have. It is important to review how much you bring in, what and where you are spending it on, and how much you need — especially if you have bigger dreams to fulfil, such as providing for your children’s education, purchasing a property or planning for the future.
Use this handy savings goal calculator to keep track of your savings process and learn how to tweak it in order to achieve your goals. Even if you do not have a habit of saving regularly, the tool will also help you to work out where you stand financially now and in the future based on today’s cost of living.
Add Up the Small Things Slowly
Don’t despair if it seems like it will take forever to save enough to reach your dreams. It is not always about the numbers you put in, but how often you think and plan with those numbers. Consistency is a key element in developing your financial future.1 Even if your wad of hongbao cash suddenly seems very limited, small amounts of savings can grow over time.
Multiply Future Possibilities
Aside from Chinese New Year, there are several months in the year where your rate of savings might be higher. This could be a year-end bonus, when your commission comes in or a pay rise at the end of your probation period. These are happy occasions, but they also point out how cyclical your financial future can be.2
The future may be one big unknown to you right now, but it also holds many varied possibilities. Instead of stashing all the cash away in your drawer, turn these annual rewards into even bigger rewards by way of a wealth accumulation plan, which can multiply the money for you. This allows you to better navigate through great opportunities in the years ahead. More significantly, such plans are flexible to adjust and accommodate to your changing needs and priorities.
After all, there will be times when your financial inflow is more than your spending, and then there are others when expenses mount up and income remains stationary. Putting your money in different types of insurance or savings plans is also another way of investing in your future and diversifying these investments, whether in the form of life or health insurance, or endowment plans.
Getting covered for the years ahead and exploring the potential the future has to offer you can be as easy as talking to a financial advisor.