Otoshidama: Japan’s New Year Tradition of Giving Money in Colorful Envelopes

Did you know that Japanese children start the New Year by receiving money in special envelopes?

In Japan, January is a time for family gatherings, delicious meals, and visits to shrines. On top of these traditions comes one of the most exciting customs for children: Otoshidama (お年玉)—money given by adults in small decorated envelopes.

It’s like Christmas presents—but in cash!

But Otoshidama is more than just a lucky gift. It has centuries of history, once linked to offerings for the gods, and today it reflects both family bonds and modern society.

From beautifully designed envelopes to the timeless question of “how much is inside?”, let’s take a closer look at this beloved Japanese New Year tradition.

Origins and History of Otoshidama

Before we explore how Otoshidama is practiced today, let’s first take a look at its sacred origins and the way this tradition has evolved over time.

The Sacred Origins

Otoshidama was not originally money—it began with rice cakes (mochi).

In ancient Japan, people believed that the Toshigami (年神), the New Year deity, visited each household at the start of the year. To welcome the deity, families prepared kagami mochi (鏡餅), round rice cakes placed as sacred offerings, thought to embody the spirit of the god.

When the New Year arrived, Toshigami was believed to descend and infuse the kagami mochi with a year’s worth of life energy. The head of the household would then break the mochi and share it with family members. Eating it—often in the form of ozōni (お雑煮) soup—was seen as a way of absorbing divine blessings and the spiritual strength to live through the coming year. In this sense, the mochi itself was the first form of Otoshidama (御歳魂)—a sacred gift of life and protection.

Another interpretation suggests that the word comes from “toshi-dama” (年賜), meaning “a gift of the year.” This highlights the belief that each New Year brought a precious blessing from the gods to be shared with the family.

History and Transformation

The custom of Otoshidama can be traced as far back as the Muromachi period (1336–1573), and by the Edo period (1603–1868) it had spread widely among ordinary people. By this time, it was no longer limited to rice cakes—elders began giving gifts of goods or money to younger generations and subordinates, turning Otoshidama into a shared New Year’s tradition across social classes.

Samurai gave swords
Merchants gave folding fans
Doctors gave medicine

As time went on, toys also became popular gifts for children. However, by the mid-20th century, during Japan’s period of rapid economic growth, money placed inside decorative envelopes became the standard form of Otoshidama.

From then on, the custom took on its modern shape: a heartfelt gift passed from elders to children, both as a prayer for health and growth, and as a joyful way to celebrate the start of the year.

Although today’s Otoshidama no longer comes in the form of rice cakes or swords, it still carries the same spiritual roots—connecting families and honoring the arrival of a new year.

The Envelopes: Pochibukuro

The small envelope used for Otoshidama is called pochibukuro (ポチ袋). You might be wondering—why are these envelopes called pochibukuro? In this section, we’ll explore the answer and discover the colorful world of these charming envelopes.

The Origin of Pochibukuro

The word “pochi” comes from a humble expression in the Kansai dialect meaning “just a little” or “this small amount.” In the past, it was a modest way of saying, “It’s not much, but please accept it.” Over time, this expression became attached to the envelopes themselves, giving rise to the name pochibukuro.

Types of Pochibukuro

Today, pochibukuro come in countless creative designs. They are usually made of paper and range from traditional to playful, giving both children and adults something to enjoy.

Animal-shaped designs that are playful and cute
Fortune-slip versions (omikuji) that add a touch of luck for the year
Traditional envelopes featuring the zodiac animal of the year
Character-themed envelopes decorated with anime, manga, or game characters—ranging from Disney favorites to Pokémon and even the beloved Anpanman
Humorous designs with words like “bribe” or “secret fund,” which make adults laugh

For children, the excitement is not only about what’s inside, but also about which design they will get. Some even collect the envelopes year after year, treasuring them as much as the money itself. And surprisingly, it’s not just children—many adults also enjoy browsing the wide variety of designs, finding joy in picking out envelopes that match their own sense of humor or style.

In this way, the pochibukuro adds a layer of fun, humor, and tradition to the Otoshidama custom, making the New Year feel even more festive and special.

How Much Do Children Get?

Have you ever wondered just how much kids can expect to get during the New Year? The amount usually depends on the child’s age and the giver’s relationship to them. Younger children usually receive only a small amount, and the sum tends to increase as they grow older.

In most families, children receive Otoshidama only while they are still students. Once they enter the workforce and become adults, it is generally understood that they no longer receive Otoshidama—instead, they join the adults in giving it to the younger generation. This shift from receiver to giver is one of the fascinating aspects of the custom.

Here is a general guide to the typical amounts given at different ages:

Age Group	Typical Amount (JPY)	Approx. in USD
Elementary school children	¥1,000–¥3,000	$7–$20
Junior high school students	¥3,000–¥5,000	$20–$35
High school students	¥5,000–¥10,000	$35–$70

Of course, these numbers are only a general guide. The actual amount varies depending on the family, the region, and sometimes even the generosity of the relative. Some grandparents, for example, are known to give a little extra, while parents may keep the amounts more modest.

For children, Otoshidama is a rare chance to receive a significant amount of money all at once.
Getting Otoshidama from parents, grandparents, and several relatives makes the New Year feel like a dream come true!

Fun for Kids, Pressure for Adults

Otoshidama is pure joy for children—but what does it mean for the adults who give it? In this section, let’s take a closer look at the different ways Otoshidama is experienced by kids and by grown-ups.

For Children

For children, Otoshidama is a time when dreams feel within reach.

At New Year gatherings, they eagerly wonder, “When will I get my Otoshidama?” Even before opening the envelopes, imagining how to spend the money is part of the fun.

It can be the chance to finally buy a toy or game they’ve wanted all year. In some families, however, parents carefully collect and manage the money, saving it for the child’s future instead of letting them spend it right away.

For Adults

For adults, the story is quite different. Giving Otoshidama is both heartwarming and financially demanding. With nieces, nephews, and grandchildren all expecting envelopes, the total amount given out can grow quickly. Some adults even joke that the New Year feels like a “second Christmas” when it comes to spending.

Unspoken though it may be, many adults feel the pinch more as children get older and the amounts rise. Yet most parents and relatives see Otoshidama as more than just money. It is a way to pass on tradition, express affection, and celebrate family ties. And in the end, the joy on children’s faces makes the lighter wallet worth it.

Otoshidama in Modern Japan

The tradition of Otoshidama is still alive today, but the way it is practiced keeps changing to reflect modern Japanese society. In particular, it’s interesting to see how the custom adapts in an era where cashless payments are becoming more common.

In practice, even in the age of cashless payments and digital wallets, Otoshidama is still almost always given in physical cash. Part of the fun is opening the envelope, counting the bills, and feeling the excitement of having “real money” in hand—a joy that no digital currency or cashless payment can match. For many adults, it is also seen as a learning opportunity—teaching children how to value the cash they receive and think about how they will use it.

New Forms of Otoshidama

In recent years, however, new forms of Otoshidama have emerged, influenced by modern ways of handling money and payments.

Some companies and offices hold lighthearted “Otoshidama lotteries” or raffles as a New Year’s perk for employees.
Families sometimes slip gift cards or prepaid electronic money cards into pochibukuro as a modern alternative to cash.
Experience-based gifts have also become popular. These include amusement park tickets, movie passes, or trial lessons for hobbies—gifts that create memories rather than material possessions.
Online gifts are on the rise as well, especially among younger generations. Popular choices include in-app currencies for games, or subscription cards for streaming services.

These variations show how Otoshidama continues to adapt to contemporary culture, balancing the spirit of tradition with the creativity of modern Japan.

Similar Traditions Around the World

While Otoshidama is unique to Japan, the idea of giving money or gifts at the New Year is shared by many cultures around the world.

China: During Lunar New Year, children receive red envelopes called hongbao (紅包) filled with money, symbolizing good luck and prosperity.
South Korea: Families give money known as sebaetdon (세뱃돈) to children after they perform a New Year’s bow to their elders.
Vietnam: Children are given red envelopes as well, but the name differs by region—Mừng tuổi in the north and Lì xì in the south. Both terms carry the meaning of wishing for luck and blessings in the year ahead.
Western countries: While cash gifts at New Year are rare, Christmas serves a similar role, with children receiving presents from parents, grandparents, and relatives.

These parallels show that while the customs differ, the heart of the tradition is the same everywhere: to celebrate the new year by sharing good fortune and strengthening family bonds.

Conclusion: More Than Just Money

From its sacred beginnings as offerings of rice cakes to the gods, to today’s colorful pochibukuro filled with cash or creative gifts, Otoshidama has always been more than just money. It is a tradition that reflects Japan’s history, values, and family bonds—passed down through generations with both joy and responsibility.

For children, it is a time of dreams, excitement, and treasured memories. For adults, it is both a heartfelt duty and a way to show love, care, and blessings for the younger generation.

Even as modern Japan embraces cashless payments, online gifts, and playful new forms of Otoshidama, the heart of the custom remains the same: to celebrate the New Year by sharing good fortune and strengthening the ties between families.

So the next time you hear about Otoshidama, think of it not only as money in an envelope, but as a symbol of Japan’s unique way of welcoming the year—with gratitude, joy, and hope for the future.