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Weekly Family Finance Picks (#16)

We’re constantly scouring the Internet looking for articles related to family finances and teaching kids good personal finance habits. You can visit the FamZoo delicious page to see our ever growing list of family finance bookmarks. Each week, we pick our favorite articles from the previous 7 days and post them here.

Oops! I’m a bit late getting the picks out this time. Sorry ’bout that! Here are our favorites from the preceding week:

If You Give a 7-year-old $100…

056/365/2010 [easy come easy go]

I loved Julie’s story about her Mother-Son bonding weekend in New York City with her 7 year old and ...“The Benjamin” — aka the $100 bill. It’s a funny, instructive account of her son’s transformation from spendthrift to saver (with a little clever assistance from Mom & Dad). A great teachable moment.

Three Money Lessons From Teenagers

This is a follow-on to Laura’s Six Ways to Teach Your Children About Money post that we featured here a couple weeks back. The sequel post was prompted by her own kids. They came up with a few savvy recommendations that Mom missed the first time around. I’d say the Dogu kids are on the right personal finance track. Well done, Mom.

The Family Department Of Taxation & Finance

Check out Bella’s unique allowance and chore system which she dubs “The Family Department of Taxation & Finance”. Read about how she weaves together a set of components — expected tasks, behavior dings, extra job opportunities, and mom grants — to form a creative financial education system for her child.

Oh yeah, and here’s the other cool thing: Bella was able to implement her custom system in FamZoo using a clever combination of accounts and checklists. Nice!


A Peek In The Lab: iPhone App (Phase 1)

Lots of folks have asked about iPhone and Droid versions of FamZoo. Yep, we’re working on those right now!

We’re keeping things pretty simple in our first versions. You’ll be able to browse account balances as well as review, add, edit, and delete transactions (deposits and withdrawals).

Want to see our work-in-progress? Watch this video:

In the meantime, did you know you can communicate with FamZoo from your mobile phone right now using simple text messages? All you have to do is add your mobile phone number to your member settings and text one of our FamZoo Quick Commands to the phone number 41411.

Don’t know about our Quick Commands? Visit the Mobile tab and look in the right side bar for a quick reference. Try’em out right there on the same page using our mobile phone simulator. Quick tip: try creating shortcuts for your most common commands. For example, using a shortcut, I can check my son’s spending account by just texting FAMZ followed by his first initial. Really quick and easy.


Weekly Family Finance Picks (#15)

We’re constantly scouring the Internet looking for articles related to family finances and teaching kids good personal finance habits. You can visit the FamZoo delicious page to see our ever growing list of family finance bookmarks. Each week, we pick our favorite articles from the previous 7 days and post them here.

The picks for this week are:

Delayed Gratification and the Secret to Will Power

Delayed Gratification

Jessica’s article touches on the famous “marshmallow experiment” and the positive side-effects of being able to delay gratification. When it comes to saving, do we have to develop super-human will power to defeat our natural instant gratification impulses? Not necessarily. Jessica suggests it’s more about using some simple tricks to distract yourself from your spending impulses. FamZoo uses these same techniques to help parents build solid saving habits in their kids.

Philosophy vs. Reality

I really enjoyed Mir’s witty, well-written post about her new allowance approach and the benefits of having an automated, online, cash-less system. She shares some entertaining commentary on the age-old question of whether to tie chores to allowance. Her approach: she delivers regular allowance independent of chores, but docks the kids for non-compliance. I’ve always rather liked that middle-ground model.

For their allowance system, they happen to use a hand-crafted solution built using Google Docs by her “handsome and wonderful—albeit geeky” husband “Otto”. That’s completely OK with me though. Hey, you gotta respect “geeky” spouses! Whether you use a packaged solution like FamZoo or roll your own using anything from spreadsheets to pencil & paper, the key thing is to have a system and to use it in a way that consistently reinforces your family’s values.

What Kids Should Know About Money At 9, 13, 18 and 23

Dan provides some nice detailed advice for teaching key money lessons as your child matures through the elementary, middle-school, high school and college years. Check out the advice sections at each stage, and see how you’re doing as a money mentor.

Bonus Pick

Got a few minutes to fritter away? Check out this “Financial Game of Life” animation from BillShrink.com. Just click on “Spin”.


How To Change Your Member Settings in FamZoo

We’re producing a set of short How-To videos for embedding within the FamZoo application. Here’s our first one: “How To Change Passwords, Sign-in Names and Other Member Settings”:

Got feedback? We’d love to hear it.


National Money Night Talk: Car Costs 101

The Money Night Talk High School Exercise: Car Costs 101
Click to enlarge.

As I mentioned in yesterday’s post, tomorrow is the National Money Night Talk event. The materials on the site include an exercise for High School age kids called “Car Costs 101”. It’s enlightening.

One way to bring the exercise to life is to capture it in a FamZoo budget. Click on the image to the right to see the weekly, monthly, and annual costs for a teen purchasing and driving a typical used car.

It’s pretty eye-opening (if not eye-popping)!

A few things I learned along the way:

  • Car registration fees vary wildly by state. Check out this study put out by the state of Idaho for 2008. Some serious variance there!
  • Teen car insurance is insanely expensive. You can get a general sense from this bar chart.
  • California leads the pack in gas prices (OK, no surprise there). You can see average prices by state here.

This Thursday is National Money Night

This Thursday, September 16, is The National Money Night Talk event presented by American Express and finance expert Jean Chatzky. The idea is to sit down with your kids and have a discussion about personal finance basics. The goal: improve the odds of them enjoying a better financial future. Sounds good!

They’ve collected a set of nice resources for parents on the site that include videos, talking points, and exercises. The resources are conveniently organized by age level: middle school, high school, and college.

If you’re a FamZoo family, you’re probably already living many of these discussions in a hands-on way. For example, the middle school exercise “Let’s Set Some Goals” maps nicely to Savings Goals and the Savings Planner in FamZoo. It involves a discussion about how long it takes to save for a new bike with varying levels of weekly saving.

Here’s how to experience the exercise in FamZoo:

Check out rest of the materials on their site, and, if you aren’t already doing it, make sure you have “The Talk” with your kids. (Yeah, sure, you should have that other talk too, but that’s outside our area of expertise...not to mention our comfort zone.)


Weekly Family Finance Picks (#14)

We’re constantly scouring the Internet looking for articles related to family finances and teaching kids good personal finance habits. You can visit the FamZoo delicious page to see our ever growing list of family finance bookmarks. Each week, we pick our favorite articles from the previous 7 days and post them here.

The picks for this week are:

Sweep Long Term Savings

Where a Bank Watcher Banks
by Jennifer Saranow Schultz
on The New York Times Bucks Blog

Lately, I’ve been looking around for the most convenient way to periodically take my kid’s virtual long term savings account balances in FamZoo and roll them over to real world savings accounts. Jennifer’s article might just point to the solution I’ve been looking for: Orange Savings Accounts at ING Direct. The particular points of interest for me are: opening an account looks really easy, you can create any number of "sub-accounts" under a single login, no fees, no minimums, and attractive interest rates (relatively speaking).

I did some additional searching around and found these two nice articles on fivecentnickel.com that explain using the ING Direct "sub-accounts" as a place to sweep your kid’s long term savings virtual balances:

I’m going to give this a try in the next couple of weeks, and I’ll let you know how it goes.

10 Traits of Debt-Free People (of Modest Means)
by Len Penzo
guest posting on MSN Smart Spending Blog

Len’s article lists the key traits that separate the "financially free" from the "financially inept". OK, as an engineer, I’ll admit that I was naturally drawn to the first trait: being detail oriented. My own nerdy biases aside, I still think it’s an excellent list.

Where do you stand on these traits? Are you modeling these traits to your kids? Do you discuss them explicitly? Good food for thought.

Six Ways to Teach Your Children About Money
by Laura F. Dogu
on Forbes Personal Finance Blog

Laura is a top contributor over at the Bogleheads forum: an online community dedicated to “the civil discussion of investing, personal finance, and consumer issues.” She shares her six favorite suggestions for teaching kids critical financial skills — including taking “taxes” out of your kid’s allowances.

We haven’t imposed allowance taxes in our family to date, but it sounds like a reasonable idea as long as you take the tax money and spend it on something enjoyed by the whole family as described in last week’s DadCents video post.

How many of Laura’s suggestions have you implemented with your kids?


Create Your Own "Dad Cents" Family Bank with FamZoo

Every family has it own little nuances, and there’s no one “right way” to prepare your kids for the real world.

That’s why making it easy to customize FamZoo has been a core design principle from the outset. You should be able to configure your Virtual Family Bank in a way that makes sense for your family and your unique values.

The following video is just one example of how you can customize FamZoo to match a unique perspective. Has you family customized FamZoo to emphasize a particular value, perspective, or technique? If you’re comfortable sharing, we’d love to hear about it!

Here’s a transcript of the video:

Hey everybody! Bill Dwight here from FamZoo.com.

Just recently, I had the pleasure of meeting Shane Barkley, the author of Dad Cents - Teach Your Children the Biblical Principles of Money.

We talked for hours. And the more we talked, the more excited we got.

That’s because it became clear that FamZoo is a really easy way to take the principles described in Shane’s book and put them into into practice with your family.

Let’s take just one simple example. In Chapter 18, Shane introduces the “60% Rule”. That’s the idea of learning to live on 60% of your income. In other words, just 60% goes towards spending. Where does the rest go? Giving, saving, and taxes.

In his book, Shane recommends introducing your kids to the 60% rule early on. How? Divide their allowance into different parts or categories for spending, giving, saving and taxes.

Taxes on kids? Yep! I know what you’re thinking. My first reaction was, hey, I don’t want to tax my kids! But, the more I thought about it - Shane’s approach makes a lot of sense.

It warms kids up to that unavoidable concept and makes their first real paycheck experience less of a shock. But more importantly, the pooled tax money goes to an outing or an item that’s fun for the family. Everyone (parents too!) chips in for the benefit of the whole family. That’s a good thing.

Now, to track all this stuff — how allowances are being divvied up into categories, how much is currently in each one, interest you’re awarding on savings, and so on — Shane recommends setting up a system he refers to as the Family Bank.

Now you can do all this on a spreadsheet (like I used to do), or even pencil and paper. But, this is where FamZoo comes into the picture. We make it super easy to set up your own Dadcents Family Bank. We automate everything we can — like allowance and interest delivery. And the cool thing is that you and your kids can access it online from a browser, or from a cell phone when you’re on the go. Plus we have all kinds of extra built-in tools to help you teach your kids good personal finance habits. You start really simple and then get more and more sophisticated as they grow from young kids to tweens to teens.

So, let me show you how easy it is to set up your own Dad Cents Family Bank on FamZoo.

After registering your family on FamZoo and adding your family members, you’re ready to set up your family bank.

We have a simple wizard that walks you through some of the most common bank setups.

One setup, the Spend-Save-Give plan, is a pretty close match to the Dad Cents approach. We’ll start there and then make a few additions. Let’s update the account names to match what’s in the book. Let’s set the interest rate on the savings to be pretty aggressive and monthly as Shane recommends.

Click on save and we’re almost there. You can see we have a three-way split in allowance right now, so let’s make a couple of tweeks to exactly match the Dad Cents approach.

First, let’s add an additional Giving account for the special Offerings. As Shane describes in the book, this will be for periodic donations to charitable projects of your child’s choosing.

Second, let’s add an account for the family Taxes.

Now, all we have to do is edit the allowance and update the split percentages to match what’s suggested in the book.

That’s it. We’re all set to go.

Back on the Overview page, we can see that weekly allowances are automatically scheduled to be delivered each Friday.

Likewise, monthly interest payments are automatically scheduled for delivery.

Now, if your child needs to make a withdrawal for a purchase or a donation, just click on the minus button next to the right account. You hand the money over to your child (or pay for the item yourself using whatever means is appropriate) and deduct that amount from their account.

In the case of a deposit, your kid hands the money over to you. You click on the plus button to credit the right account and put the real money wherever appropriate. Just remember, like a real bank, you owe the balance to your depositor. It’s your kid’s money and you need to be able to redeem it upon request.

So, that’s a very quick intro to setting up your own Dad Cents bank in FamZoo.

If you have any questions or comments, don’t hestitate to contact us at FamZoo.com.

Or, you can contact Shane at DadCents.com.

Thanks for watching, and we look forward to hearing from you!


Weekly Family Finance Picks (#13)

We’re constantly scouring the Internet looking for articles related to family finances and teaching kids good personal finance habits. You can visit the FamZoo delicious page to see our ever growing list of family finance bookmarks. Each week, we pick our favorite articles from the previous 7 days and post them here.

Two short stories and a quick summary video made the cut this week:

An Ode to My Son’s Piggy Bank
by Trent Hamm
on The Simple Dollar

Simple Dollar SetupI love this short story. Trent relates how his four year old son purchased a "Zhu Zhu Pet" — yeah, I had no idea what that was either — and why the experience made him such a proud father. It’s a perfect illustration of how a simple and thoughtfully applied allowance system can have a profound impact on your child’s development. Read it here.

Money and Kids: Letting the Consequences Do the Disciplining!
by Sandra Huber
on Soulful Thoughts

I love this short little story too. Sandra describes her daughter’s experience with an impulse purchase and its consequences. By sticking to her allowance policy and suppressing her natural instinct to “rescue” her child from a bad decision, Sandra allows her daughter to experience a valuable epiphany. Read the quick story here.

Why You Should Give Your Kids an Allowance
by Kim Vatis
on NBC 5 Chicago

Here’s a nice quick (1min 25sec) video from NBC in Chicago that reviews why and how to give an allowance.

View more news videos at: http://www.nbcchicago.com/video.