Time flies, and in the blink of an eye, the spring of 2022 is about to come to an end. I wonder how everyone has been doing this spring? Have you been stumped by a tricky issue? That is, whose responsibility should the children's lucky money be? This millennia-old dilemma now finally has an answer. Let's learn about it together.
Every Spring Festival, regardless of whether adults are happy or not, children are definitely the happiest. Not only can they wear new clothes and eat delicious food, but most importantly, they can receive a lot of lucky money. All the elders who meet will express their blessings and hopes for the year through the form of red envelopes.
The reality, however, is that children who receive red envelopes often have them taken away by adults before they can even warm them up, with the reason being, of course, very consistent: "We're afraid the children will lose it." As children grow older, their desire to fight for the ownership of their lucky money will become increasingly strong.
At this point, parents are in a bit of a dilemma. If they don't give it to the children, they fear the children will be upset. If they do give it, they worry that the children will spend it recklessly. So, what should we do?
In fact, there is a very effective and practical method, which is to open an independent bank account and deposit the money. You can tell the children the amount and also tell them that this money will always be theirs. When they reach adulthood, they can freely dispose of this money, such as buying their own mobile phones, laptops, or other personal items. At that time, I think no child would be unwilling.
Now that we know whose responsibility it is to manage the lucky money, the next focus of our discussion today is how to save this money to maximize returns.
Speaking of lucky money, although it can only be saved once a year, with the improvement of people's living standards and the continuous rise in prices, the lucky money children receive each year is also increasing. It ranges from a few hundred to tens of thousands, and after years of accumulation, it is indeed a significant amount.When it comes to returns, the most cost-effective and safest method is, of course, fixed deposits. Since the money is not intended to be used for many years, this is when we can apply the "ladder deposit method" we discussed earlier.
This means that in the first year when you start saving for your child, you deposit a lump sum for a three-year term. In the second year, you deposit another three-year term, and in the third year, you do the same. The crucial step is in the fourth year; while you are setting up another three-year term, the deposit from the first year also matures. At this point, you can combine the principal and interest from the first year's deposit with the fourth year's red envelope money and deposit it as a new three-year term. This process can be repeated for many years until the child reaches adulthood.
What do you think of this method?
If you are still not satisfied at this point, I have another suggestion.
That is to open a children's card in the child's name. Many banks offer such cards nowadays, which come with two benefits.
First, the card is in the child's name, which can motivate them to save consistently and witness the magic of earning interest on their savings, making it a great way to cultivate financial intelligence.
Another advantage is that many banks offer exclusive deposit products for children's cards, meaning that the interest earned on red envelope money deposited with this card will be significantly higher than that of a regular card. Why not try making money while you sleep?
So, have you learned the correct way to handle red envelope money?For friends who have questions, you can leave a comment in the section below, and let's discuss together.
Well, that's all for this episode. If you think what I said makes a bit of sense, please give a strong thumbs up by long pressing the like button, and thank you for your support and recognition.
