Red envelopes are a traditional way to present money to kids as New Year gifts. They are called hongbao, in Mandarin, and are a well observed custom at Chinese New Year.
Red is a symbol of energy, happiness, and good luck, and sending such a packet is a channel for sending good wishes and abundant luck. It is a way to share your blessings, and a strong tradition in Chinese culture.
It is most polite to open the packet alone, not in front of the person who gave it to you, and when giving money it is best to give in even numbers (except the number 4!).
May you have bountiful blessings to share this New Year. Pass them along to those you love!
Standard A2, envelope included.