Cashing in

Most of us received a lot of red packets over Lunar New Year. Now the question is: what are we going to do with that extra cash?

There are so many things to buy, games, CDs and makeup. But perhaps there are better things to do with our money. You need to look ahead.

According to Billy Mak Sui-choi, associate professor at the department of finance and decision sciences of Hong Kong Baptist University, money can be used in three different ways - it can be spent, saved or invested.

Professor Mak advises that parents guide their children to make the best use of their money, instead of just holding the money for them.

'Parents should let teenagers allocate their money so they can learn how to handle it and take responsibility for it. This will help them to develop the right attitude towards money.'

Investment is a more active way to accumulate a fortune.

According to Professor Mak, when students reach Form Three, they should start learning about making investments.

'They will touch on economics in their school syllabus when they are in senior forms. They can incorporate what they've learned in school into the real financial market,' he said.

Kathy Cheung, country corporate affairs director of Citi Hong Kong, also agreed that the concept of investment should be introduced to Form Three students.

She advised young people to develop a habit of saving.

'Saving is the fundamental form of investment, and should begin when you are young,' Ms Cheung said.

She said money saved now can become the capital to invest in future.

'There is no standard percentage of saving which suits everyone. I advise teenagers to save half of their income after deducting their fixed expenses, such as bus fares,' Ms Cheung explained.

'In terms of investment, teenagers can try to exchange their money to foreign currency. The risk is lower and teenagers can learn how to analyse the market.'

Teenagers can also contribute some of their money to charity. They can sponsor a child's studies or donate money to victims of the recent mainland snowstorms.

'This gives the message to the teenagers that money can also be spent to bring hope and happiness to others,' Professor Mak said.