What to Do With Your Ang Pow Money This Chinese New Year

Tong tong chiang! Besides parking ang pao money in savings, here are some alternatives you can explore. The original version of this article was published on StashAway.my.

What are you doing with your ang pow money this year?

Even if you’re receiving just a few hundred ringgit, 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 ang pow money can give your financial goals a nudge in the right direction.

Here are some ways you can put your money to good use.

Roll your ang pow money into your debt repayments

If you rack up any poker or mahjong debt over the festive CNY period, you can use your ang pow 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.

Malaysian banks typically charge an interest rate of approximately 15% per year, so if you have credit card debt it can snowball quickly. Even a modest amount of RM5,000 paid off over 6 months will cost you an extra RM221 in interest. In the long term, you’ll be throwing away money (and a part of your ang pow!).

Top up your emergency fund with your ang pow money

If the events of 2020 have taught us anything, it’s that you can’t predict an emergency. On top of that, you might have already tapped into your emergency fund. That’s why it’s important to 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 StashAway Simple™, our free cash management portfolio.

Invest your ang pow 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 ang pow 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 ang pow money – have a meal with friends, book a trip to the day spa, or buy the next thing on your wishlist. It’s up to you!