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Spend Money Like a Pop Star...Or Not: FamZoo's FinovateSpring 2013 Demo

FamZoo's Chief Dad, Bill Dwight, Presenting at FinovateSpring 2013Last week, we unveiled our new family pack of prepaid cards at FinovateSpring 2013, the demo-focused conference for innovative financial and banking technology. We were honored and delighted to be voted by the audience as one of 5 Best of Show recipients out of 72 presenting companies.

Woot!

In case you didn’t get a chance to catch our demo, or you just want to examine it more closely (because you were busy sending snarky tweets, or you tuned out as soon as you saw the Biebs, or you just plain nodded off), I’m posting a rough transcript below. I say “rough” because I don’t memorize my scripts word-for-word for two reasons: 1) I’m completely incapable of doing so, and 2) it tends to kill the mood.

Note: The videos of the presentations have now been posted by Finovate, and ours is here:

Compare with the script below to see where I ended up winging it.


[Screens come on with Bill watching the following video starting at the 0:40 mark for 13 seconds until pausing at 0:53 mark.]

[Looks up at audience sheepishly.]

Oh, hey. I was just checking out the Biebs. Catchy lyrics, huh?

I got money in my hands that I’d really like to blow
Swag, swag, swag,
on you.

OK, I’m not even totally sure I know what that means, but as a father of 5 (4 teens so far), I think I have a pretty good inkling. Did you know that almost 250 million kids have watched that video? Amazing, if not scary.

But I’m not here to talk about teen pop stars today. I’m here to talk to you about teaching kids good money habits. How do parents do that?

Well, I think part of it is having a solid financial role model. Someone who reinforces good, responsible money behaviors, like moderation and delayed gratification.

[Wink wink nudge nudge gesture to video.]

I think another part is lots of hands-on practice. That’s key to mastering any skill.

So, what if we could roll those two things together into a custom, educational banking experience designed specifically for kids? A place where our kids could repeatedly practice handling real money while immersed in the positive imagery of a responsible role model. It would be like financial training wheels for adult banking. Wouldn’t that be awesome?

Well that’s exactly what FamZoo lets me do. I can set up a custom, private, virtual banking system for my kids.

For example. check out what I’ve set up for my teenage son, Payton, in FamZoo.

[Expands browser window to reveal the following account screen.]

Spend Like A Pop Star Account from Finovate Demo

Here I am signed into my very own private virtual family bank — the “Dwight Family Bank”. You can see all our family members over here in the sidebar. I’m signed in as me, the dad, so I can see all my kids’ accounts as well as my own. When kids sign in, they just see their own accounts.

By the way, notice this lower sidebar area, the upper banners, and the branding. That can all be customized by a specific partner — like a bank or a credit union — using our Partner Edition offering.

More importantly, individual families can customize the experience for their kids based on their own unique values. So, I’ve created a spending account for Payton, and called it “Spend like a pop star”. We’re looking at the online view of that account’s transaction history right here.

FamZoo lets me customize the account description for my son, so I’ve done that and have embedded a cool video featuring our esteemed teen pop star money mentor. I even gave my son a prepaid card featuring that very same financial role model. That way, whenever he’s is thinking about money, he’ll be encouraged to emulate the behaviors of a teen pop star.

Let’s look at some of his transactions to see how it’s going so far.

I figure kids love their independence, so I let him loose with his card and a $1,000 a week allowance for babes, bling, or whatever. I just get out of the way. Kids can’t stand it when parents interfere in their lives — they just want to be left alone with their peers. Is that so wrong?

You can see the strategy is really paying off. Everything here looks good, except for perhaps this purchase of an LA Kings tattoo — just like the Biebs has. That’s really disturbing because I’m a big, big Sharks hockey fan...

[Pauses. Walks out to side of podium.]

OK, before you go sending any snarky tweets, let me just say that this is obviously absurd. I mean, no parent wants their kid emulating a teen pop star when interacting with money. Right?

So, of course, I’m only kidding here. Well, mostly kidding... I did actually mean what I said about:

  • having a good money mentor,
  • getting lots of hands on practice,
  • having a banking experience designed specifically for kids,
  • and using prepaid cards as a stepping stone to checking accounts and credit cards.

I just wouldn’t structure it this way.

So, let me show you the custom banking experience that I really set up for my son, and that we’ve been using together for the last 6 months.

[Switches over to Son’s Prepaid Card account shown below.]

Teen's Prepaid Card Account from Finovate Demo

One of the first things you’ll notice: this isn’t an isolated teen prepaid card. We’ve built something really cool and unique using the API to TransCard’s prepaid card platform. Payton’s card is part of a group — or a family pack — of prepaid cards that we use together. You can see my card on the left here. I load my card up periodically from an outside source through a bank transfer, or a MoneyPack, or, if I want to load it for free, I can use Dwolla.

Then I use my card as the funding source for a whole bunch of micro-transfers to my son — payments for allowance, chores, reimbursements, etc. And, sometimes, money even flows in the other direction from my son’s card to my card — for penalties or bill payments when he picks up his share of expenses like his cell phone data plan. The great thing is that all of those micro-payments back and forth are card-to-card transfers within TransCard’s platform. That means they’re all immediate and free.

Before we walk through some recent transactions on my son’s card, let’s step back and look at his financial big picture by clicking on the “diagram” link in the left sidebar.

[Switches to account diagram for son.]

Teen's Account Diagram from Finovate Demo

Now you can see how we’ve really set things up in our virtual family bank for Payton. He gets a modest allowance (not $1,000 per week!), and 80% of it feeds into his spending card. The remaining 20% is split between long term saving and charitable giving.

You can see the balance on his card has been trending up. Perhaps because of the 0.2% compound interest I’m paying him each week as a reward for NOT spending. Remember, that interest is defined and paid by me through an automatic card-to-card transfer which is immediate and free of fees.

You can also see that he’s saving for a MacBook Pro as well, so that helps put a damper on the miscellaneous spending too.

As for money coming out, he’s got some regular automatic monthly bills to pay his parents for the iPhone data plan and the phone insurance. These are also free and immediate card-to-card transfers, but in the opposite direction. So, he needs to plan ahead to make sure he’s got the balance to cover those expenses at the end of each month.

Now, let’s go back and take a look at Payton’s transactions to see how this has all been playing out recently. I’m going to highlight 9 transactions.

[Focuses attention on first transaction.]

First 5 Prepaid Card Transactions from Finovate Demo

I recently shot him a $5 bonus with a text message from my cell phone for memorizing all the U.S. President’s names — an extra credit exercise for his History class. I was very impressed by that, since I can barely remember the names of my 5 kids.

[Focuses attention on second transaction.]

Next, you can see that his allowance was automatically delivered by FamZoo, with 80% of the total going to this spending card. That’s an automatic transfer from my funding card that happens each week.

[Focuses attention on third transaction.]

Then you can see a typical teen purchase for some McDonald’s fast food. Since the FamZoo cards are MasterCard® prepaid debit cards, they’re accepted pretty much everywhere — both online and in stores. That’s really crucial when it comes to accommodating typical teen spending destinations.

Notice that I can drill down on the detail by clicking on the little “settled” icon to check out what time the purchase was authorized. Good. Not during class hours!

Transaction Authorization Time from Finovate Demo

[Focuses attention on fourth transaction.]

Next, you can see the automatically delivered weekly interest payment that I’m paying my son to encourage him to maintain a healthy balance on his card and generally spend less. It’s a parent defined savings reward.

[Focuses attention on fifth transaction.]

Here’s a really common scenario: I’m reimbursing Payton for a couple items he bought for a school project. You can see the two purchases just below. OK, at least, he said that iTunes purchase was related to his English presentation. At minimum, it was a creative story, so I’m rolling with it. To reimburse him, I just click on the credit link to enter the transaction description and amount. Behind the scenes, the amount is transferred immediately from my card to his.

Reimbursement Credit from Finovate Demo

[Focuses attention on sixth transaction.]

Here are the automatic debits for the “child bill pay” that we discussed earlier — one for Payton’s monthly share of the iPhone data plan and another for the monthly installment of his cell phone insurance. He needs to plan ahead a bit to make sure he has enough on his card to cover these payments to me at the end of each month.

Transactions 6 and 7 from Finovate Demo

[Focuses attention on seventh transaction.]

This next transaction highlights our integrated chore chart capability. You can set up a checklist that automatically credits one or more accounts whenever an item is checked off. Or, if you prefer, you can set up a “Chore Fail” chart like we do in our family to ding your kids when they blow off their chores. You can see Payton got dinged a buck here for not making his bed. Here’s a peek at our checklist:

[Navigates to associated chore checklist.]

Chore Fail Chart from Finovate Demo

You can group a set of single and/or repeating items onto a checklist, and each item can optionally have associated rewards and/or penalties.

[Navigates back to transactions. Scrolls back in time to page 2. Focuses attention on eighth transaction.]

Tax Refund Transaction from Finovate Demo

Here’s something cool. Each of the cards has an associated account and routing number pair, so you can set up direct deposit right to a family pack card. This can be really handy. For example, I wanted my son to learn how to do his taxes online with TurboTax. This isn’t your most compelling teen activity! But, when I told him he could get a nice refund for his summer job and have it delivered directly to his card, he quickly changed his tune!

[Focuses attention on ninth transaction.]

IOU Transaction from Finovate Demo

And, finally, I saved the coolest transaction for last. My son registered for his AP exam online with his card, and I needed to reimburse him for the $110.00 fee. Unfortunately, when I tried to do so, I was short of funds on my card by $89.18. Uh oh. Look, I missed a subsequent automatic interest payment as well.

No worries! FamZoo detects whenever I run short of funds on payments to my kids and automatically creates and tracks the appropriate IOU amounts. As soon as I get around to reloading my card again, FamZoo automatically repays any IOUs that I have outstanding to my kids, like it did here after I reloaded my funding card with a transfer from Wells Fargo.

You can see what it looks like over on my prepaid card. I can jump to the related transaction on my card by clicking on this little card icon.

[Jumps to related transaction on funding card.]

IOU Automatic Repayment from Finovate Demo

Here, you can see the load from Wells Fargo followed immediately by the automatic IOU repayment to my son.

The bottom line: you don’t have to be the perfect financial role model to use FamZoo effectively with your kids. You just have to care a little bit more about your own kids’ money habits than your typical teen pop star does. We’ll help you with the rest.

So that’s what our new offering is all about: a customizable family banking experience built on a group of prepaid card accounts that parents use together with their kids to teach good money habits in a way that’s consistent with their unique family values. All for one low monthly fee that covers every card in the family.

Multiple cards. One fee. Good money habits. Together.

If you’re a parent, swing by the booth and find out how to get in on our sweet promotional offer for the first 1,000 prepaid card family packs.

If you’re a potential partner, come by and let’s talk about how you can offer virtual family banking as a new product to your own customers. I can show you what I didn’t have time to show here: how easy it is to customize the branding and how to place targeted offers inside the app.

Otherwise, just drop by and grab some FamZoo cartoon stickers. They’re always a hit with any age, and they’re a lot easier to remove than an LA Kings tattoo.

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My Finovate Scorecard Winners Plus Snarky Tweet Highlights

Bill's FinovateSpring 2013 ScorecardThe Finovate conference for spring 2013 just wrapped up in San Francisco, and the audience selected their 5 favorites from a line-up of 72 financial technology innovators. As one of the presenters, I was barred from casting a formal vote, but I did keep an informal grade sheet as I watched my colleagues up on stage. I awarded two grades:

  1. Presentation Grade: How engaging was your presentation? If you can’t hold the audience’s attention, they aren’t going to appreciate your product — no matter how awesome it is. They’ll be too busy reading the back of their eyelids or, worse, sending snarky (but often quite funny) tweets.
  2. Product Grade: How innovative is the product? Products can be innovative in a number of different dimensions, so this is just an overall personal gut feel. Is it a clever new twist on an old problem? Does it break new technical, usability, or capability ground? Is it a bold vision in a potentially emerging market? Perhaps a dramatic simplification of a tedious but important process? Or, a super useful leveraging/mash-up of new platform technology? Maybe it simply fills a real need in a “Doh! Why didn’t I think of that?” kinda way. All valid criteria for a high product grade in my book.

So, without further ado (and for what it’s worth), here are the 15 “double A” demos on my personal Finovate scorecard that garnered top marks for both presentation (first grade) and product (second grade):

  1. Money Desktop (A/A+): Ryan and Matt packed an insane amount of gorgeous, innovative UI sweetness into 7 minutes — expertly choreographed to make it through everything under the buzzer. The new products, Insight and Target, extend MoneyDesktop’s customer facing PFM UI prowess to the back-office of financial service organizations. Now, analysts can create marketing segments based on aggregated PFM user data and create/deliver targeted offers to those segments. MoneyDesktop delivers great cutting edge user experience. See it in action here.
  2. TipRanks (A/A): Uri and Gilad had a comfortable, easy-to-follow delivery, and sported cool T-Shirts to boot (wish I had scored one of those at their booth, darn it!). Their product lets you see the track record of any stock analyst who publishes buy/sell recommendations online — as tweeter Chris Giles put it: “accountability for financial talking heads”. TipRanks cleverly satisfies a need for some and a curiosity for the rest of us.
  3. PayNearMe (A/A): Danny and John delivered a very clever and engaging “sandwich-board” skit (or “anti-demo” as tweeter Brad Leimer put it) in the first half of their presentation to illustrate why and how they enable people to make payments to remote merchants with cash delivered to their local 7-Eleven. They followed it up with a clear online demo of their new white-label offering. PayNearMe is a very innovative application of new technology to an old-school problem.
  4. Lendup (A/A): Sasha kicked off a nice casual, clear delivery by calling out an attendee in the front row who was zoning out. That got (and then maintained) everyone’s attention. If I’m recalling correctly, they also had a gutsy real-time money transfer in the demo that delivered right at the buzzer. Nice (unintended?) tension element. The product helps the underbanked borrow and build credit. It’s a more socially responsible alternative to payday loans that systematically rewards good repayment habits. Not surprisingly, I love that angle given how we feel about teaching kids good money habits.
  5. Kofax (A/A): Anthony and Diane delivered a very clear, straight-ahead demo showing how to capture account on-boarding info like a license or a utility bill using the customer’s mobile phone camera. I enjoyed the mocked up license with the hand-drawn face (it’s the little touches sometimes), and was interested to learn that some licenses have bar-coded info on the back. (They may want to relabel that “Capture Backside” button lest customers start sending them some disturbing pictures!) I could see Kofax being something that would be very handy for verifying young adult cardholders in a FamZoo family pack. The product leverages a now ubiquitous technology (mobile camera) to solve an annoying, tedious, practical problem — manual account verification.
  6. Bright Funds (A/A): Ty and Rutul delivered an engaging, easy-to-follow presentation with a well-executed demo. The mutual fund model meets philanthropy: BrightFund groups non-profits into “funds” associated with high level causes — like poverty, education, and environment. Users can invest in a portfolio of these pre-canned funds as well as design their own funds. This is a cool way to address the problem of donors being overwhelmed by a gazillion philanthropic choices and struggling to perform thoughtful due-diligence on each. It’s a cool, useful new idea with a nice, clean user experience. I also think this would be a great option for FamZoo families introducing their kids to philanthropy.
  7. Better ATM Services (A/A): Todd delivered a very clear, compelling presentation of his company’s thin, durable prepaid cards that can be selected, loaded, activated, and dispensed through ATM machines after installing a minor hardware modification. It’s a cool piggy-backing on top of the staid, ubiquitous technology of ATMs. Someday, I’d love to see FamZoo customers printing out family packs of prepaid cards this way.
  8. Virtual Piggy (A/A-): Jo did a terrific job presenting with a warm, comfortable, logical delivery that easily held audience attention. The product is a new online payment system for parents to set rules around how their kids transact online in a COPPA compliant way. They debuted a slick mobile app for kids under 18 to make parent authorized purchases through their virtual piggy account using just a username and password. The purchase is completed using the parent’s payment mechanism that is linked to the account. Kids can transact online and now in-store using a bar-code. This is a cool forward-looking payment technology that addresses the needs of parents with kids. Naturally, I’m a big fan of this space. As with any new payment technology, the challenge is getting widespread merchant adoption. Ubiquity is a very important requirement for typical teen purchase patterns, so I hope it catches on.
  9. Realty Mogul (A-/A): Jillene had a very unique, serious presentation style — described as "Shatner-esque" by one tweeter. Love it or hate it, it kept the audience dialed in. The product allows accredited investors to buy shares of pre-vetted investment properties through a simple online experience — a very cool new “crowd funding for real estate” idea.
  10. Prestadero (A-/A): Gerardo opened with fun stats about APR rates in Mexico that kept the audience buzzing. The product provides the first peer to peer online lending platform for the Mexican market. This seems like a very big untapped opportunity.
  11. Finect (A-/A-): Jennifer gave a very professional, clear presentation that was easy to follow and understand. Finect provides a social network for financial professionals that meets compliance requirements and shares outward with existing social networks. As Ian tweeted: “a LinkedIn for the investment industry.” The product meets a real (if not annoying) practical need for the financial industry.
  12. Balance Financial (A/A-): Devin delivered a relaxed, clear presentation. The product is a digital work space for finance professionals to interact privately with their clients. I think of it as a Basecamp for the financial advisor industry. This just struck me as a very useful, practical idea with a clean user experience.
  13. Intuit Financial Services (A/A-): Unfortunately, I didn’t write down any specific notes about Gregory’s delivery, but it must have been extremely solid given the “A” I scrawled in the margin of my program. Intuit unveiled their home business support for Mint users including Schedule C categories, splitting of transactions between business and personal expenses, receipt capture, and tax planning. I can’t say it was a hugely inspiring UI next to MoneyDesktop (really tough comparison!), but it was clean, and the product offers a very practical set of new features for the hordes of small business owners out there.
  14. Refundo (A-/A-): As John Waupsh tweeted, Roger gave a “really laid-back” presentation of a “super simple product.” Simple is good, especially when your product is a mobile banking experience targeted at un(der)banked communities. Tax professionals can initiate the accounts to hold their client’s tax refunds. That seems like a smart onboarding/channel strategy. The app comes in Spanish, too. That also seems like a smart play. This strikes me as a very big, important opportunity, and Refundo seems to be tackling it in the right way.
  15. Allied Payment Network (A-/A-): Bringing a little levity to the stage, Ralph and Steve had the crowd chuckling with their demonstration of the first ever bill payment by mind-reading (aka, remembering and executing a recent payment via the “Read Mind” button). But, their real demo was of their mobile picture pay — just point, shoot, and pay a bill with your mobile camera. They also demonstrated payment by voice. I thought Picture Pay was a neat and convenient application of near ubiquitous smart phone technology.

Finally, my honorable mention in the geeky-yet-unique-and-useful product innovation category goes to Quantopian. I thought it was super cool how you can code up your own automated trading algorithm, test it out immediately on historical market data using their backtester, and ultimately deploy it — all from your browser. As a long-time software geek myself, I could really dig that one. I may have to give it a spin. Well, maybe everything but the final deployment step...

And, just to cap it off, here are some of my favorite snarky tweet gems from day 2 (sorry, too amped up before my demo to collect them on day 1). See if you can remember the moment:

Did I miss your favorite demo or snarky tweet? Share it in the comments.

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How Much Allowance Should You Pay Your Teenager?

How much allowance should I pay my teen?I bumped into an old friend this week at Starbucks, and he hit me with one of the all-time classic teen parenting questions:

Bill, how much allowance should I give my teenage son?

The short unhelpful answer: “it depends” — of course.

A longer, more helpful response? Here’s what I would suggest when it comes to allowance for a teen. (Note: I’m assuming it’s during the school year and your teen isn’t holding down an outside job. I’d recommend a job during the summer if possible and adjusting things accordingly):

  • Decide on the rough categories of things you want your teen to be in charge of buying — weekday lunches? clothing? entertainment? I’d try to keep it pretty simple. Don’t boil the ocean here. If you make it too complicated, you’ll struggle to consistently follow through.
  • Throw in a small amount for “random wants” — basically pocket change that your teen can blow on stupid stuff or, if motivated, squirrel away each week to save for that special item. Having to delay gratification and go through the extended act of saving is really key here. (See the famous marshmallow experiment.)
  • Have your teen propose a simple high level budget for the above. Review it together and revise until it’s acceptable.
  • Base your allowance amount on that budget.

The bottom line: comparing absolute allowance amounts with peers is pretty much meaningless. Families have wildly divergent expectations about what expenses their kids are responsible for covering and what constitutes a wise purchase given each family’s unique financial situation, money values, etc. That’s why I like the “budget-based-allowance” approach vs. the “but Johnny and Suzy get $X” whine-fest. Logical. Easy to explain. Easy to defend. Plus, when teens help come up with the budget, they feel ownership. They’re bought in. You’re virtually guaranteed to have less complaining and begging downstream in my experience.

Sometimes, it’s helpful to keep a few separate allowance buckets. For example, I had a separate use-it-or-lose it clothing allowance arrangement with my daughter. She couldn’t use clothing money for other stuff, but she could apply her entertainment budget to clothing if she wanted to. I also made her clothing allowance annual instead of monthly or weekly. I wanted her to wrestle with managing a large sum of money over an extended period of time. Experiment a bit, and try whatever tweaks make sense for your teens and family situation. Remember, you can always fine tune things over time, so don’t over analyze it.

Prom Can Take a Big Bite Out of That Clothing Budget!

Another thought: I’ve made several loans to the teens over the years for big ticket “needs” like a laptop. In the laptop case, the loan amount is for the delta between the most basic model and whatever fancy-pants, high end model they think they “absolutely must have.” I “garnish” their allowance to pay it back over a year or so. That way, they really appreciate how much those things cost as they see the payments going out each week and have to cut back on their other spending. The added bonus: they invariably take waaay better care of the things they buy that way. Again, it’s all about ownership and shared skin in the game.

Track Loan Repayments From Your Kids

A parting thought: for teens and college kids, prepaid cards are a really good option. I’ve been using prepaid cards with my 16 year old son for the last several months, and I’ve been very pleased with the results. There’s no worry about running up a debt like with a credit card. Prepaid cards are minimal hassle to get and low commitment relative to a full fledged checking account at a bank. All good things when it comes to dealing with the combustible mixture frontal-lobe challenged teens and money.

I’ll leave you with a list of teen prepaid cards to consider: