With children and teenagers set to receive ang pow during Chinese New Year celebration, parents can take this opportunity to teach them about good money habits. — 123rf.com
CHINESE New Year, which will be celebrated this Saturday, is a time for many things, including Mandarin oranges, red (or bright) outfits and ang pow, or money in red packets given to young people and those who are not married. Ang pow is given as a gift and symbolic of good wishes on Chinese New Year and other auspicious occasions, like weddings.
A huge number of ang pow will be changing hands this weekend, which means children and teenagers will receive quite a sum of money. While some parents allow their kids to keep what they receive, others take charge of their children’s ang pow – to be saved or used in ways parents deem fit.
Jopez Academy founder Ernest Tan, whose company organises workshops and activities for parents to impart financial literacy in children, says in the last few years, he has encountered more teenagers asking why they weren’t allowed to manage or spend their ang pow money.
“Some of them asked me why their parents ‘confiscate’ their money and some think that they are their parents’ Chinese New Year ‘money-making’ machines,” he says.
Tan says both parents and children (especially teenagers) need to create a harmonious environment when it comes to money this festive season.
“Chinese New Year is a period when much money is going around and a lot is needed for the celebration. A situation that involves money presents a teachable window for families to start money conversations,” he says.
Father-of-two Ricky Yip, 49, says his wife Ong Peng Geok takes charge of their children’s – Lucas Yip, six, and Haley Yip, two, – ang pow collection. “Once the festivities are over, we deposit the money into their accounts for future use. Both of them already have their savings account set up,” he says.
Financial education company Little Tauke chief executive officer Ng Pui Yee says given the current economy, a discussion about money in the family is important.
“Many workers don’t get bonuses, prices of items have increased and many families find it financially stressful to celebrate this year. Talking this out in the family can help parents teach and empower their kids to manage money better,” she says.
Tan at a workshop where he talks to parents about financial literacy among children. — Photos: ERNEST TAN
Spending money
Tan says there are various ways that children and teenagers can spend their ang pow money without creating a friction with their parents. But, parents need to take the lead and explain, advise and justify their concerns about how their children spend their ang pows.
“Parents can discuss a realistic spending plan, allowing children to use 20% of their ang pow. If the child wants to allocate more to this ‘spend’ jar, or if they identify a large purchase, like a computer for school assignments, then parents should encourage and help them work towards achieving that goal,” he says.
As parents, Yip says, they always emphasise the importance of spending ang pow money wisely, with a focus on education.
“If they have their eyes on something expensive, we encourage them to think it through. And if the item exceeds their budget, we encourage them to save their own money to make up the difference,” Yip says.
Ng says parents should teach kids to save and invest, explain the importance of having a solid amount in savings and how compound interest can help grow their money. “This teaches them delayed gratification, a vital aspect of financial literacy,”
“But money is not solely for saving and spending; it’s also for sharing. Teach kids generosity by bringing them to an orphanage so they can share their money with kids who don’t have much. It will teach them generosity and gratitude. Get them involved in the research and selection to make the donation process more meaningful,” she adds.
Yip with his wife Ong and their children. — RICKY YIP
Lifelong skills
Tan says teaching children about money goes beyond the Chinese New Year celebration.
“Parents should turn financial lessons into lifelong skills and conversations about money should be part of family conversation. This includes discussing weekly allowance and what happens if it is not enough. Family members should also discuss big purchases like a family vacation or buying a new car or a house. This consistency ensures that financial literacy becomes an integral part of the kids’ lives,” he says.
Ng says a money jar system, separate ones to save, spend and share, can help kids practise good financial habits.
“When parents give out allowance, try to spare a little more so kids can manage their money. And as parents, you should show your children how you practise the money jar system by allocating your monthly pay for living expenses, big ticket purchase, personal education, donation and a fund for any extra,” she adds.
Annie Goh, 54, whose three children are Choo Tse Hong, 24 Goh Wen Wen, 15, and Goh Yun Yun, 11, says they are already familiar with the money jar system.
“After the 15th day of the new year, they divide their ang pow money into three jars; setting aside money for spending, saving and sharing. If the savings jar reaches a certain threshold after a few years, we consider investing it for their future,” she says.
Goh says her children are involved in deciding what their money will be used for.
“Each jar represents their own funds, and this gives them a sense of autonomy and responsibility over their finances. This approach helps instil good financial habits and encourage them to take ownership of their financial decisions,” she adds.
Tan says for kids to learn, parents must walk the talk.
“Demonstrate responsible money habits and attitudes. If parents exhibit wise financial decisions, such as saving and investing 10% to 30% of their income, they will show their children the fruits of patience and consistency, which their children will follow,” he says.
Yip says he believes in instilling financial literacy from a young age. “One of the key lessons we teach is the value of preloved items and embracing sustainability by reducing waste and reusing items. We emphasise the importance of patience, teaching them that things can wait, and encourage minimalism in their approach to possessions,” he says.
“Our approach is to prioritise savings, so we always encourage them to set aside 50% of their money for saving or investing. The remaining is allocated for spending. We emphasise the concept of delayed gratification, teaching them that patience and saving for the future are key principles in managing their finances responsibly,” he concludes.
