Some of my favourite childhood memories are centred around Chinese New Year. I always looked forward to the parties, the feasts, and, of course, those little red pockets!
Kids love receiving money, so Chinese New Year, or any other special occasion that results in a mini-windfall, is a great time to start teaching our kids about money!
My son, Thomas, is now three, so this was the first year that he understood what he was receiving inside those little red envelopes. Here’s how I took the opportunity to begin planting the seeds of financial literacy. I hope it encourages you to also start ‘em young with the money talk!
We put the money in his bank account
If you’re like our family, half the fun is in emptying the red pockets at the end of the night and counting the cash. I talked to Thomas about the different values of the different bills. Instead of letting the bills sit in a piggy bank (or go into Dad’s wallet!), I immediately put the cash in Thomas’ bank account, and explained to him what that meant. For his age, he seemed to understand that the bank’s role is to keep our money “safe”. In a couple of years, we’ll start talking about the concept of earning interest.
Talk about Saving
My son got excited about his new earnings, and immediately started asking about what toys he could buy. We only buy him toys for Christmas and his birthday (although he has still ended up with mountains more than he needs). My wife and I decided that Thomas can use his own money to make a special purchase outside of those “gift-giving” occasions. So we encouraged him to think about a larger item that he may want to save up for, rather than running to the Dollar Store and buying everything in sight. A bike, a more expensive toy, or sports equipment are great items to suggest. Teaching kids to save up for a larger item that they really want can offer valuable lessons in patience, goal-setting, and money management.
We all try to instill positive values in our children, but how many of us put our money where our mouth is? It’s not always easy with our busy schedules, but I try to take my children to charity events to show them what it actually means to give back to our community. Chinese New Year is a great time to encourage our kids to use their new cash to support those who are less fortunate than us. We’ve been explaining the concept of charities, and how they need financial support. Thomas is going to pick a charity to make a small donation to. A great way to make it more personal is contributing pledge money to a family member or friend who is participating in a fundraiser. Thomas will also use his own money to buy his brother’s birthday present. This obviously does not qualify as charitable giving, but it is a chance for him to think about someone other than himself.
Children are smart, and the groundwork that we lay during their early years can lead to a strong foundation of financial literacy and responsible money management.