Can Your Bored 9 Year Old Help You Run Your Business?

Ahhh, summertime...

9 year old son: “Dad, I’m bored. Do you have any jobs for me?”
Dad: “Ummm, not unless you’ve got some Internet marketing skills I don’t know about.”
9 year old son: “What’s Internet marketing?”
Dad: “Nevermind...”

Hey, wait a minute. My son can read, he’s savvy on the computer, and he’s pretty darn smart (if I don’t say so myself). Maybe I actually can use him on some of my Internet marketing tasks if I factor the work properly.

For example, one of my more routine tasks is to scan a daily automated Google alert for decent articles related to teaching kids good money habits. I add the good hits to our library of bookmarks and leave comments if I think I have some value to add to the article. Finding the good ones means sifting through the alert and filtering out hits that aren’t truly relevant or ones that are just blatant instances of nonsensical keyword stuffing. My 9 year old is certainly capable of making those judgement calls.

All I have to do is devise a simple system for him to identify the good matches and relay them to me. So here’s what we’ve come up with:

  • I copy the contents of each Google alert I receive into a Google Docs document.
  • My son reads the title and summary for each hit and, if necessary, drills down to the full article to determine whether it’s a good hit.
  • If it’s a good hit, he highlights it in yellow for me.
  • He let’s me know when he’s done, and then I just concentrate on the handful of highlighted entries for further curation.

Here's what it looks like when he’s done:
How I Put My Nine Year Old To Work

It’s been a win-win-win-win-win:

  • He isn’t bugging because he’s bored
  • He’s saving me time
  • He’s exercising his mind
  • He’s earning some dough (so he can blow it on Crowns for Wizard 101)
  • He does quality work for a very low wage

Maybe summer isn’t so bad for FamZoo after all.

How about you? Can you find a clever way to put your kid to work on something you’re trying to accomplish this summer?

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How to Create an Online Chore Chart in FamZoo

Do you pay your kids to do chores? That's what personal finance experts Dave Ramsey and Suze Orman recommend.

Or, maybe you expect chores to be completed without pay. After all, nobody pays you to make your bed, right? That’s how parenting experts Michele Borba and Dr. Joanne Stern feel.

Or, maybe you like the hybrid approach: basic chores are expected, but extra chores pay a commission, like Frugal Dad recommends.

Regardless of which model best fits your family, it makes sense to use a chore chart to set clear, explicit expectations about what should be done when and by whom.

These days, it makes a lot of sense to spell out those expectations online. Why? Here are a few of my favorite reasons:

  • Your kids are online. They’re comfortable with technology — maybe more so than you.
  • Everyone knows what’s due and when. Anyone in the family can get at their responsibilities from anywhere — even on the go via mobile phone. Still hearing excuses? Set up some automatic reminders. Kids don’t have to come to the chore chart anymore — the chore chart comes to them. Can’t you just see your tweens or teens rolling their eyes already?
  • It’s easier than using paper. It’s easy to set up recurring chores once and have them appear automatically thereafter. It’s easy to automatically tally up commissions for completed chores and credit the proper accounts in the Bank of Mom/Dad. It’s easy to change things as your kids mature.
  • No more re-writing history. There’s an automatic historical record which comes in handy during subsequent “negotiating” with the kids. I’ll confess that I do enjoy showing them how much money they could have made if they had followed through a bit more consistently.

Ready to get started? Here’s how you do it step-by-step:

Step 1: Sign into your FamZoo account and click on the Checklist tab.

Getting to the Checklist Tab to Create a Chore Chart

Step 2: Click on a Create link to start creating your chore chart.

Creating a New Chore Chart

Step 3: Give your chore chart a name and fill in some other general settings.

Setting the Chore Chart Name, etc

Step 4: If you want to pay your kids for chores (or ding them for neglecting them), check the Rewards & Penalties box.

Enabling Chore Credits or Debits

Step 5: Click an Add Item link to start adding tasks to your chore chart.

A New Empty Chore Chart

Step 6: Fill in the fields for your each new task.

Adding a New Chore

Step 7: If it’s a recurring chore, pick a start day (the Due field) and select options for how often it repeats.

Selecting the Chore Start Date

Step 8: Set an “expiration date” on your chore so unfinished chores don’t clutter up your list.

Setting a Chore Expiration Date

Step 9: If you’d really like to annoy your kid, set up a text message reminder for the chore.

Setting a Chore Reminder

Step 10: If you’re going the pay-for-chores or the hybrid route, indicate how much should be paid to which account when this chore is completed. You can add multiple entries here if you’d like to split between multiple accounts — like spending, saving, and giving.

Note: if you want multiple kids to compete for a first come, first serve chore payment, see this post on setting up First Dibs Chore Charts.

Setting the Chore Amount

Step 11: See what your new chore looks like on the chore chart.

A New Item on a Chore Chart

Step 12: Play around with different views of your chore chart by clicking on the viewing links.

Changing the Chore Chart View

Step 13: Try checking off a chore by clicking on the check box.

Checking Off a Chore

Step 14: See what a chore looks like when it’s completed. (You can un-check chores too and any related commissions will be “un-paid.”)

A Checked Off Chore

Step 15: Hop over to the transactions page for an account in your virtual family bank to confirm that the commission has been paid.

A Chore Transaction

Got questions? Don’t hesitate to ask. We’re always delighted to help.


Teach Your Kids Personal Finance Basics to Fight the Summer Brain Drain

Last Wednesday morning, I was interviewed by Joe Orlando of the Sacramento Fox40 local news station. The segment was part of a series on how parents can avoid the summertime “brain drain.” One way is to use the summer months to teach your kids the practical skills they don’t typically learn in school — like personal finance.

Here’s the video followed by a transcript:

Paul: Kids, they pick up the video games and they put down the books.

Sabrina: It happens that there are things parents can do to keep their kids learning this summer. Joe Orlando introduces us to inventor Bill Dwight. He is here to tell us about his new virtual banking system.

Joe: I thought that brain drain was what I got because my kids were home all summer, that’s what I thought I got. Bill thanks for joining us this morning.

Bill: Yeah, thank you for having me.

Joe: I appreciate your time. I’ve always been one of those parents if you want something in the house, you know my daughter, she’s home this summer. I said do you want to make some money. She’s like yeah, dishes every day, $10 that week.

Bill: Well, that’s the thing; it’s a very personal decision. The important thing is that your kids have some of their own income whether it’s through allowance or working for chores or outside jobs or even just picking up change in the sofa but they need to make their own decisions. So we have a site famzoo.com that helps parents teach their kids good personal finance habits with our online virtual bank.

Joe: So I’m a parent, give me some tips, things I can do.

Bill: Well first, give them some of their income to spend and then split it between spending, saving, and giving. That’s a great personal finance tip. If you pull out first for saving and giving and investing and then spend what you have left you’ll be a great shape.

Joe: Okay.

Bill: The next thing, as a parent, you should encourage your kids to save so give them some incentives, maybe match their savings or match their giving or give them some accelerated interest. That’s where the famzoo.com comes in because you run your own bank and you’re the bank manager so you handle deposits, withdrawals, and payments. And you can also give them a very aggressive interest rate, much better than what you get down at your bank.

Joe: My daughter has decided she is saving because she wants to buy an Escalade for $70,000 so that’s a lot of dishes.

Bill: Well, on the site, what you can do is create a savings goal for her and you can show her just how many decades it will take to save for that Escalade.

Joe: Nice, I like that.

Bill: Because I did that with my daughter, she wanted a new Jetta.

Joe: You did, what did you do?

Bill: So we entered a savings goal and she was like okay, I get it. Now I don’t want a new Jetta.

Joe: Now you are seeing right behind us here, if you just want walk us through this a little bit.

Bill: That’s a savings goal right there.

Joe: What are we looking at?

Bill: This kid wants to save for an iPad and he’s realizing you know what; that’s going to take over a year, which is basically an infinite amount of time for a small kid.

Joe: Sure, sure.

Bill: So then, they go in and say well hey pops how about you give me 1% interest on savings.

Joe: Yeah.

Bill: How about I babysit every week and make $10.

Joe: Sure.

Bill: Well then, I can bring it in to November.

Joe: Well, not only that, this is a little family time because you are working with your son or your daughter and you are working together on this and you know, it gives you a little bit of time together and then that way when he or she grows up they’ll have a feel for how to manage their money.

Bill: And it’s not something they’re teaching in the schools.

Joe: No.

Bill: And it’s intimately intertwined with your values.

Joe: Right.

Bill: You say you don’t do allowance, that’s fine.

Joe: Right.

Bill: Don’t be swayed by what your neighbors are doing. Do what’s right for you, your family, and your financial situation.

Joe: Okay, any final advice in the last 10 seconds here Bill.

Bill: Well, come by, check it out, and you’ll love it. Here’s their online banking record here and teach them now before they get out of the house.

Joe: I like that. All right, thank you so much Bill. Guys, I think this is an outstanding thing for the kids.

Paul: Oh yeah.

Sabrina: Fantastic.

Paul: Kids learning that money is attached to the amount of effort required to get it.

Joe: Yes, gee what a novel idea Paul.

Paul: That’s really great and by the way Joe, the daughter that wants to get the Escalade, she’s going to be a junior next year.

Joe: She’s going to be a junior.

Paul: Yeah, that’s what I thought.

Joe: Yeah, let’s break that down Paul – how many years and how many dishes?

Paul: You know what, that screen behind you is not big enough for the graph that we would be required. 7:21 at FOX40, thanks guys, that’s a great program. Let’s check weather now Dennis is looking at a hot day ahead.


Money Lessons from 3 Dads: Weekly Family Finance Picks #51

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. We’re up to 1618 now! Each week, we pick our favorite articles from the previous week and post them here.

I’m taking it easy today, so I’m posting three of my top picks for Father’s Day without my usual commentary. This week’s theme is, naturally, financial advice from dads. These are all excellent in very different ways. Check’em out:

Happy Father’s Day to all you dads out there!

P.S. Dad, thanks for being the perfect role model — financial and otherwise.


Online Allowance Q&A, Buying AAPL Slice by Slice, Buying Bonds: Weekly Family Finance Picks (#50)

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. We’re up to 1610 now! Each week, we pick our favorite articles from the previous week and post them here.

This week’s picks kick off with some classic online allowance management Q&A followed by two interesting options for introducing kids to investment fundamentals.

New Technology Teaches Kids How to Save

Online Allowance Q&AFarnoosh’s article about online allowance trackers highlights one of FamZoo’s competitors and mentions two others in the body. There’s no mention of FamZoo. Ouch, that hurts!

So, why highlight this article in this week’s picks? Well, it stirred up a lot of interesting, pointed conversation in the comments. Wedged between juvenile assertions by the typical collection of Yahoo comment trolls were some very thoughtful questions and comments — ones that I encounter frequently when addressing the topic of online allowance and chore management. I jumped into the fray and added my two cents here and there. To spare you the tedium of wading through the troll clutter, I’ve embedded a recap of my interactions below.

Here’s a handy index of the questions covered. Just click on one to see the response, or scroll down to browse through them in sequence.

In her comments, “Mrsdarcy” raises the question: Should schools be in charge of teaching our kids financial literacy? My thoughts on the schools vs. parents financial literacy topic:

I applaud financial literacy efforts in schools as well, but I think that money and values are intimately intertwined and, as a result, parents should take an active role in mentoring their kids in this area — above and beyond whatever schools are (or are not) doing.

Several folks posted comments that amounted to the question: Can’t I just use real world savings accounts to teach my kids about money instead and save myself the $30/year fee typically charged by these new “virtual family bank” solutions? My response:

If you choose to go the real banking route with your younger kids (instead of the “virtual family bank” route offered by these sites), I’d recommend checking out ING Direct’s Kids Savings accounts — they make it easy to set up multiple accounts so you can do the splitting between spend/save/give/etc as desired. I think you’ll find the approach less flexible and convenient though with less emphasis on teaching personal finance basics to your kids (like budgeting, spend tracking, loans, family collaboration, chore tracking etc). That’s why I built FamZoo in the first place. If $30/year/family is too pricey, there are some free alternatives — typically with fewer features or a different business model (like affiliate links to Amazon products).

A fellow named “Bob” described a clever system he rolled out to his kids using accounts at Ally bank. It’s a really thoughtful comment and approach, so I’ll repeat it here:

We direct-deposit payment (allowance) each Friday for chores done. The amount is lowered if the chores are not completed; we also apply a small penalty if chore is not done on time. We use the Ally bank kid’s money market and savings accounts to separate the savings and spending (it is also paying 1%, which is better than most anything else). Each kid gets $12 per week, of which $2 must go into long-term savings and we match the $2. The remaining $10 is direct-deposited to the money-market account. They either have to use the ATM card and withdraw money to spend or do an electronic transfer to our account if they need money right away. They are also required to pay $15 per month for unlimited text messaging and insurance on the phones.

We do encourage them to save at least 25% of gift money; however, if they have a purchase in mind, we will by-pass that, as long as it is reasonable.

The net effect of this is that over the last two years, each kid (12 & 13), have saved $500+ and think about their spending when they have to dip into that account or as the 12 year old puts it “wasting” her money.

Since the remaining $25 per month does not go very far, we do not require them to pay for all extra-curricular activities, but during school breaks when they want to do something every waking moment, we may pay for one night of skating or swimming, etc, but other activities are paid by them. Or when shopping and they just have to have something, then we dip into their funds.

Don’t know if it is the perfect scenario, but we have seen nights out being forgone so they could save for the i-touch. We have also seen them ask for extra chores to make extra money to go somewhere or to save for a bigger purchase.

My comment to Bob effectively answered the question: How do I use a virtual family bank in conjunction with real world savings and investment accounts?

Bob - that’s a great system. Kudos. One thing about banks is the (semi) hidden fees. Ally is pretty up front about them. For example, at Ally, once you exceed 6 transactions per “statement cycle” (I assume that’s per month), you get hit with a $10 fee per transaction. Might not take long to exceed $30 bucks at that rate. Here’s their page: http://www.ally.com/bank/online-savings-account/fees.html Lots of our customers just use the virtual accounts as temp holding buckets and roll the virtual funds over to real world saving/investing accounts when they reach a critical mass. They use a virtual account for general spending to avoid per-transaction fees and to assess their kids for shared stuff like their share of cell phone plans/insurance. It’s basically just a convenient family accounting system.

A reader named “Sun” effectively asked the question: Why not just stuff money in envelopes — one for savings, one for giving, and one for spending/fun? My thoughts:

Sun — yep, envelopes can work just fine. That said, lots of folks just like the whole online/mobile convenience and associated teaching tools of an online virtual bank, not to mention avoiding the hassle of keeping physical money lying around in denominations that’s easy to divvy up into envelopes or piggy banks.

Lots of folks chimed in with comments about how spoiled and lazy kids are these days and how they had to work for every penny they ever earned, walk 100 miles to school in below zero temperatures, etc. (Ok, I’m making that last part up.) Bottom line: we were debating the classic kids and money question: Do allowances spoil kids? My two cents on that classic:

“Allowance” is such a hot button word because many immediately equate it with “entitlement.” I prefer to think of it as a budget instead. (1) Work out a budget with your child for something you’re already purchasing on their behalf — like clothing (2) Give them an allowance that matches that budget (3) Turn the purchasing responsibility over to them for those items (4) Have them track their spending and stay within budget. It’s a great personal finance learning experience and you’ll probably end up spending less overall. Win/win.

Allowance can be a pretty emotional, passionate topic for many. So, for those firmly in the anti-allowance camp, the implied assertion/question became: Allowances are evil, so why would I use an online virtual family bank? My response:

There’s no requirement to give unconditional allowance — that’s your choice — you can go the unconditional allowance-as-a-teaching-tool route, the Dave Ramsey commission-for-chores route, the only-checks-from-grandma-and-outside-jobs route, or some mixture thereof. It’s your bank, your rules.

Denise wrote in her comment:

When you don’t give the kid the cash it removes his ablity to make choices, or learn to budget for himself, you are doing it for him with the IOU. I wonder how he takes the $500 out of his virtual account when he wants to buy skateboard?

The idea of a virtual family bank is a little tricky to communicate, so it’s not uncommon to hear misperceptions like the ones expressed above by Denise. Her comment really maps to the question: How does a virtual family bank work? My explanation:

Denise, from a kids perspective, the online virtual family bank is just like a real online bank. Real banks effectively hold IOUs too. When your kid earns $20 from babysitting (or whatever), they hand the money over to you the parent. You credit their virtual account(s) with $20 and handle the real money however you like. Over time, when your child builds up enough to make that purchase (say the skateboard), you the parent make the purchase on their behalf however you normally do (cash, credit card, debit card, paypal whatever) and then debit their virtual account accordingly. The child must still make choices and can only spend up to the balance in their virtual account (which they can check online just like adults do in the real world).

It works just like the real world, but the parents run the bank/ATM and make the rules. It’s a warm-up for the online banking your kids will be dealing with in the future, but presumably its a more nurturing, educational environment where practicing and making the inevitable mistakes has less severe repercussions than in the real banking industry.

And finally, let’s address the most popular troll comment which basically equated to: These sites are a scam. Isn’t anyone who pays $30 a month for an online virtual bank an f’n idiot? My response:

To call these online virtual family banks a scam is goofy. There’s nothing fraudulent here. Parents are paying a very clear, well defined fee for an online teaching tool. (In fact, the fees are way less hidden than they are for real world checking/savings accounts!) It’s like buying any other educational product like, say, a book. As in the book case, there are ways to get similar info for free — e.g., you could surf the web and gather equivalent info yourself for free — but you might find the book to be more convenient or packaged in a way you like. Same thing here. There are paid subscription services in this area, ad supported free services, and alternate ways to teach the same lessons altogether. Pick the one you like and the one you think has the best chance of getting you to consistently follow through on the real important parenting goal here: teaching your kids the personal finance habits they’ll need to thrive in the real world. Fair enough to propose alternate approaches to reaching the same goal, but to label honest businesses as a scam because they charge a well advertised fee seems rather trollish.

Stock too Pricey? Try Partial Shares.

I like the idea of buying a very small holding in a familiar stock as a way to teach kids about the basic concepts of investing in companies. It’s a concrete way for your child to experience the potential rewards and — perhaps most importantly — the risks involved. (Make sure you’re prepared to lose money!). The problem is: many of the companies most familiar to kids — Apple, Google, Amazon, Netflix — have mighty hefty share prices. As of closing bell today, the prices of each are: AAPL $331.49, GOOG $516.73, AMZN $189.68, NFLX $262.57.

That’s why Emily’s article caught my eye. There’s a way to buy Apple one modest slice at a time using sites like Sharebuilder. You’ll want to scrutinize the per-trade and sale fees, but it sounds like an attractive approach as a real-world learning tool. Read more about it in Emily’s article here. I found another article with a bit more detail on how it works with Sharebuilder here.

If you find the fees for each of the individual partial share acquisitions unappealing, you might consider using a FamZoo virtual account to gradually accumulate the price of a full share. For example, you could create an account named "Stock Purchase" and divert a portion of your child’s weekly allowance into it. Your child could track progress toward the ultimate stock purchase using a savings goal equal to the stock price (which you can update from time to time). Once the goal is reached, you can purchase the share with a single transaction and minimize trading fees.


by U.S. Department of the Treasury Bureau of the Public Debt

Like I said above, investing in individual stocks is very risky, and you better be prepared to lose money. That sentiment was immediately reinforced in the reader comments on the previous article. As a reader named Frank points out:

Sorry to throw cold water on this, but individual stocks are not a good way for people to be investing $25 per month. 99% of people with $25 or $50 per month to invest would be better buying US savings bonds from TreasuryDirect. It's not very glamorous and it may only earn 3%, but it is safe.

So to balance out the investing lesson for your children and introduce them to options at the other end of the risk/reward spectrum, you may want to head on over to TreasuryDirect. They have a nice section for kids that explains the basics of US Treasury Securities here. It’s great for adults too — at least I learned a lot! There's also a video that shows how to open up an account and make purchases online here.


Online Allowance/Chore Bake-Off, Kelly's Allowance Heroes, GenY Joneses: Weekly Family Finance Picks (#49)

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. We’re up to 1,573 now! Each week, we pick our favorite articles from the previous week and post them here.

What’s the common thread in this week’s picks? Comparisons. Suzanne compares online allowance and chore tracking sites. Kelly compares allowance methods. And, Zac reminds us not to compare ourselves to the Joneses. Here we go:

Review: FamZoo — Flexible Enough For Every Family

OK, let’s get the shameless self-promotion pick out of the way...

Bake-Off WinnerAre you curious to know who provides the leading online allowance and chore management sites? Curious to know how they stack up against one another? Suzanne was. She took the time to throroughly test drive and review 5 of them in depth — Zefty, MoneyTrail, ThreeJars, FamilyMint, and FamZoo. She selected a winner based on the criteria most important to her family. Of course, we were delighted to see that FamZoo came out on top in this (first of its kind as far as I know) side-by-side comparison. Read the full review here.

Money Smart Kids: Allowance

Are you wrestling with the most effective way to approach allowance and chores with your kids? Maybe Kelly can help. She’s tried three different approaches so far. She describes her experiences with each here and wraps up with 5 excellent pieces of practical, concise advice. My favorite message: kids are different and kids evolve, so you’re going to need to tweak your system accordingly. No matter how different they are though, all kids need practice managing their own money.

Money Lessons for Every High-School Graduate

Hey, teens: avoid debt and materialism. Don’t worry about keeping up with the Joneses whether they’re next door or on television. Zac dishes out some excellent personal finance advice for teens and grown-ups alike. It’s particularly credible coming from a Generation Y college student who is the author of the book Debt-Free U: How I Paid for an Outstanding College Education without Loans, Scholarships or Mooching off My Parents.

Read Zac’s sound advice here.