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• Feb. 5, 2019

Our attitudes towards money are often influenced by our families and cultures. How we choose to invest, donate, save or spend, as well as the role money plays in holidays and traditions can teach us important life lessons about how we understand finances.

In our Culture & Money series, we celebrate these teachable moments with short stories about how some of these unique practices from around the world serve as valuable financial lessons.

The Red Envelope

In China, as well as other East Asian and Southeast Asian regions, parents and grandparents will often gift red envelopes filled with money to children and grandchildren during important holidays and special occasions, such as Lunar New Year, weddings, and birthdays. The red envelopes are intended to represent good luck, fortune, and happiness.

Cultural region: Mainly practiced in China and other East Asian and Southeast Asian cultures.

What is it: Commonly referred to as "red envelope" or "red pocket" in English, the practice is known as "Hongbao" in Mandarin and "Lai see" in Cantonese.

Why it's significant: This tradition is passed as a symbol of good luck, health and wealth.

  • Only clean, crisp bills should be used.

  • The amount given should never include the number 'four' (e.g. 4, 40 or 400) as it is considered an unlucky number.

  • Red envelope should always be received (and given) with both hands.

  • It is impolite to open a red envelope in front of the presenter.

When does this happen: During special occasions as a way of sharing good luck and blessings (mainly Lunar New Year, births and weddings)

"By the age of seven, I knew exactly how I wanted to apply the financial lesson that was passed on to me for years when I received my Hongbao."

Celebrated by millions, the Lunar New Year marks the beginning of the New Year on the traditional Chinese calendar.

While items such as hot tea and mandarin oranges are custom during festivities, it's the exchange of the red pocket—often from elders to children—that provides families with an opportunity to teach future generations about the importance of and different ways to use money.

The lesson taught

Growing up in China, Anna Shi's family encouraged her to spend the money she was given in red envelopes on a long-term investment—not the latest toys or gadgets (although some exceptions were made).

READ: Culture & Money - What the Mexican custom of a tanda taught me about saving

"The purpose would be to save it for my education, or an experience that would enrich my knowledge," she said. "By the age of seven, I knew exactly how I wanted to apply the financial lesson that was passed on to me whenever I received my Hongbao from my parents."

For Shi, that meant spending the money on "ping-pong" or table tennis lessons – a national sport in China.

"We used to sit together to watch the tournament and that is the main reason why I love it."

READ: Lunar New Year - Meet the designer of the TD Year of the Pig Gold and Silver Rounds

The next generation of values

Shi now thinks it's important to use the Hongbao to teach her own four-year-old daughter about managing money.

"I want her to start learning a savings habit with a clear goal in mind to instill this value at an early age."

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