In her recent MintFamily article Allowance on Autopilot, Beth Kobliner discourages readers from using online allowance sites. After declaring that FamZoo is nothing more than a “glorified gold star chart” (I guess she missed the automated compound interest, splitting between accounts, matching contributions, savings planner, expense tracking, loan tracking, and budgeting tools to name a few items), Beth delivers this bottom line assessment:
My main concern: Allowance sites can be an impediment to money talks, rather than a way to facilitate those conversations. Why talk about saving for a goal or the family budget when you can just automate your kid’s weekly allowance?
Hmmm — that’s odd. Our design goal has always been to increase those quality conversations and boost fiscal awareness, while automating away much of the tedium that causes many parents to fall off the chore/allowance wagon after just a few weeks.
Beth is a well known personal finance journalist and a member of the President’s Advisory Council on Financial Capability, so I’m inclined to take her analysis seriously. I wondered whether Beth’s harsh judgement was based on personal experience with an online allowance site, and, if so, which one? However, in re-reading the article, I noticed the following tell-tale lead-in to paragraph three:
Having never used an allowance website with my kids...
OK, so we’re left wondering how Beth came to the conclusion that online allowance trackers discourage meaningful money talks with kids. Pure gut feeling? I’ve tried reaching out to Beth on numerous occasions including just last week on her Facebook post about the article — offering to walk her through our product personally. So far, no response, but it remains an open invitation.
A comment on Beth’s article captures the perplexing nature of her assessment:
I agree about the importance of financial education for our children and I am grateful that you would write to try and increase the awareness. But I think this article and the article about old school allowance are lacking in helping any become more financially educated. In old school allowance it seems you tell a story of how it became too hard to track so you gave up trying to teach about financial education when it became the most important (teenage years). And then this post you discount the tools that allow it to be easy enough to track. We have been using an online tracker for a while now and it has been the best thing for our children and my house has never been so clean. But I do not use a traditional allowance system, the online system allows me and my children to track their financial decisions.
In the same vein, when I asked FamZoo families on our Facebook page whether FamZoo is an impediment to money talks with kids (see post), here’s the feedback we received:
Anne E: We’re recent adoptees of this online allowance process. Truth is, I was always of the view that allowance is kind of dumb. Our children do chores and help out around the house because that’s the right thing to do. We started out with Famzoo so they could learn budgeting and responsibilty with their money. They have tasks or chores equal in value to their weekly allowance. If they don’t do their tasks, they get that amount deducted from their allowance. Guess what this has done? It has them working harder! They now associate their work with money. For our family, it has been helpful and far from an impediment.
Andrew P: That is a shockingly poor article — firstly, she openly admits to not having used any of the sites, then quickly progresses to discussing the pros and cons — on what basis? Secondly, she freely admits they are a ‘cash’ using family. That is admirable, and maybe follows conventional wisdom, but we are increasingly moving towards a cash-free society. It is far better that our kids get used to dealing with money as a ‘cyber’ currency now than have them struggling with the discipline required in 10 yrs time. As far as meaningful discussions with our kids, I fail to see how FamZoo is an impediment. Our family has had many conversations about saving vs spending, benefits of compound interest over time, not rushing into purchase decisions, etc. FamZoo helps in this regard as the kids have their own login and can see their savings grow. So Beth — you can keep your cash methods — my family are sticking with FamZoo.
Shawna C: I just opened a trial FamZoo account this week and explained a bit about the idea of savings goals and compound interest to my 6-year-old tonight. I also set up a chore list for each kid, but it’s not coupled to the allowance so they can’t say, “I don’t need money this week so I’m not going to bother with my chores.” So far, so good with Famzoo!
Denise W: Well, she has not seen my FamZoo account then for sure. FamZoo and watching your money is talked about almost daily in my household.
Melissa K: I have found FamZoo to be a huge asset when it comes to teaching my 11 and 13 year old boys about money! We incorporate a lot of Dave Ramsey’s philosophies as well. We are not creating an “entitlement” culture, we are creating a family that understands that attention to responsibilities and a strong work ethic has positive results. The banking aspect of this site has resulted in a greater desire to save and a true sense of financial empowerment.
Now, these are our fans, so they’re admittedly biased. That said, their responses are based on actual experiences.
I welcome dissenting opinions from those who have had different experiences with online allowance and chore tracking sites — particularly FamZoo. Honest, thoughtful criticism helps us refine our offering and deliver a better service, so don’t hesitate to contact us.
In any case, if you scratch beneath the surface, you’ll find that we offer far more than a “glorified gold star chart.” More importantly, by putting the tedium of your kid’s money management on autopilot, we keep the meaningful money talks front and center week in and week out.
The article that sparked the commentary above.
Discuss on FaceBook.
An earlier article by Beth that covers her family’s stuggles with allowance (“With three kids, my husband and I still haven’t mastered the art of giving them allowance in a timely fashion.”)