What to Do With Your Red Packet Money This Chinese New Year

19 January 2023

What are you doing with your red packet money?

Even if you’re receiving just a few hundred, it’s good practice to plan how you’ll spend your red packet money. Whether you decide to keep it as spare cash, or to save it for a rainy day, what you do with your red packet money can give your financial goals a nudge in the right direction.

Here are some ways you can put your money to good use. And, make sure you read to the bottom to stand a chance for free investing!

Roll your red packet money into your debt repayments

If you rack up any poker or mahjong debt over the festive CNY period, you can use your red packet money to pay back your friends and family. Or if you have any high-interest debt, such as credit card debt, you should use it to fast-track your repayments.

Banks in Hong Kong typically charge an interest rate of approximately 35-40% per year, so if you have credit card debt it can snowball quickly. For example, an amount of $20,000 HKD paid off over 3 years with 35% annual interest rate will cost you an extra $10,565 HKD in interest. In the long term, you’ll be throwing away money (and a part of your red packet!).

Top up your emergency fund with your red packet money

In a climate of layoffs and high inflation, it’s wise to keep your emergency fund topped up - you never know when you might need to tap into it! So, use your savings and any spare cash to top it up again - at least until you have about 6 months of expenses set aside.

If you don’t have an emergency fund, or your existing fund isn’t set up in the best way (e.g. it doesn’t earn enough interest or requires multiple conditions to do so), consider getting started with Flexible Portfolio, growing your cash with our equivalents (US 0-3M Cash Equivalent).

Invest your red packet money

Don't have any debt and already have an emergency fund? Then consider putting your money to work by investing it.

Not only will investing expose your money to the growth of the stock market over the long term but your returns (i.e. dividends or interest generated from your initial investment) will be reinvested and compounded over time. You don't need to invest a lot each time for your money to grow significantly - it’s more about how long you keep it invested for.

At StashAway, you can get started with low-cost investing with no minimum balance - so you can put your red packet to work.

Don't forget to treat yourself

Taking care of yourself in the short term is important, too. If you’ve got your debt and emergency fund in check, and have a long-term investment plan set up, then go ahead and enjoy your red packet money - have a meal with friends, book a trip to the day spa, or buy the next thing on your wish-list. It’s up to you!

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