Chinese New Year is such an exciting time for kids! With new clothes, yummy goodies, and the thrill of receiving Ang Bao money, the joy is endless. But instead of spending it all on toys or treats, we can teach our kids to use this cash wisely for their future. Here are some fun and simple ideas to help you guide your child on how to make the most of their Ang Bao money!
Here are some ways to use your child’s Ang Bao money + tips and tricks to maximise that moolah:
1: Discuss About What to Do with Ang Bao Money
One of the things I hope to impart to my sons would be financial literacy. Teaching children about money can start at around 5 years old, where they are able to grasp the concepts of buying things and savings. My son knows what ‘sale’ and ‘discount’ mean too – kids are learning even when we’re in a shopping mall. Besides passing the cash to mummy or daddy to keep, how about giving your child the decision-making ownership to think about what he would like to do with his extra dollars? That way, he gets to weigh the pros and cons of different options. As parents, we can learn to find out our child’s thoughts, reasoning and understanding of real-life situations too.
Financial literacy tips for kids: Give your child a portion to spend or save up for something that he wants and save the rest. This lets you talk through with him about his purchase decision and budgeting too.
2: Choose Experiences Over Things
Buying a new toy or more books is an easy and immediate gratification choice. To young kids, it’s the most straightforward option because he can see, touch and feel the “prize” that he bought with his own Ang Bao money. The reality is: there’s only so much space in our homes, and kids often outgrow their toys very quickly; abandoning the old for the new. Consider spending his Ang Bao money on experiences which will create memories that will be etched in his heart and mind (and yours too!) for longer. Look out for child-friendly activities in Singapore that kids can try out, or perhaps a parent-and-child activity like a baking session. Let your child pick that fun activity that’s he’s interested in – it could be coding classes, indoor playgrounds, educational tours in Singapore or outdoor fun at Sentosa as a family!
3: Make the Most of the Child Development Account (CDA)
If your little one is under 18 months, it’s smart to put some of that Ang Bao money into their Child Development Account (CDA). The government will match your savings dollar-for-dollar! This means you’re essentially doubling the money for your child’s future education. What a great way to save!
4: Save for Your Child’s Education
As a parent in Singapore, I know that children’s education can be costly. One of the things that parents need to set aside funds for, would be for children’s tertiary education. Higher education fees are increasing; school fees and expenses differ between local universities versus an overseas education too. Don’t forget about meals, transport, textbooks and more… so, the only way to ensure you have enough for each child is to start saving early.
Tips for planning children’s education expenses: Did you know that there are education subsidies and loans for students in Singapore? Find out how the CPF Education Loan Scheme and MOE Tuition Fee Loan (TFL) help families buffer these costs.
5: Invest in the Future
Consider using your child’s Ang Bao money to invest for their future. Depending on how comfortable you feel, look into options like savings plans or simple investments. Starting early lets their money grow over time! This also teaches them valuable lessons about investing and using money wisely.
Tips: Do ensure that you’ve done your due diligence, and also ensure that you’ve at least 6 months of emergency funds and are able to commit long term (e.g., 5 years, 10 years, or more).
6: Encourage Giving to Others
Chinese New Year is also a great time to teach kids about kindness and sharing. Encourage your child to think about donating a portion of their Ang Bao money to people who may need it more. This helps them learn the importance of helping others and spreading joy in the community.
The world could do with more empathy and less self-centred people and this nurturing starts from young. Share some ideas with him on how his Ang Bao money can go a long way to make a big difference in someone else’s life.
By using these simple and engaging ways to manage their Ang Bao money, you’re teaching your child valuable life skills. Let’s make this Chinese New Year not only fun but also a powerful lesson in saving, spending wisely, and caring for others!
Are you ready to plan ahead for your family’s future, including retirement and kids’ university fees? I’m a mother and Financial Consultant raising my family in Singapore, and I understand how challenging achieving financial confidence may seem like a distant dream. I’m just a phone call or text away to share my knowledge and experience to journey with you beyond finance.
