Summer is the Time to Teach Your Kids Good Money Habits

School is out. Life skills are in. And You're the Teacher.School is out.

Life skills are in.

And you — Mom or Dad — are the teacher. Uh oh!

Summer is an opportune time to help your youngsters brush up on some essential life skills. You know, those critical capabilities that schools rarely teach, but that kids must master to thrive in the real world.

One of those key life skills is personal finance. Studies show that kids who speak with their parents about financial matters subsequently perform more responsible financial behaviors (more info here). It isn’t all genetic predisposition and brain biology. You, the proactive parent, can make a big difference.

But maybe you aren’t comfortable assuming the role of money mentor. Maybe you feel intimidated by matters of finance. Maybe you just don’t know where to start. No worries. Here are some simple suggestions to get the ball rolling.

First, set up a simple Bank of Mom and/or Dad. That just means that you, the parent run a pseudo bank where each account tracks how much you owe each child. It’s a way to teach your youngsters good money habits in a safe, educational environment with none of the hassle, risk, or unpredictable fees of adult-centric financial products that your youngsters aren’t quite ready for. Need a little more info? Check out these two posts:

With your simple family banking system in place, have your child pick a few of the following exercises:

Earn Extra Money from Odd Jobs

That should be enough to get the ball rolling.

Life Skills Summer School is now in session. Good luck!


The Bank of Emah: Spend-Save-Give Allowance Based on Expectations

The Bank of EmahLast week’s Wall Street Journal article, For $3 a Week: Buy Tops and Earn Interest, describes the allowance and chore strategy that Emily Pierce and Thompson Emah use to teach good money habits to their 7 year old son, Ryan Emah.

They’ve set up an online virtual family bank for Ryan with the following policies:

  • a modest weekly allowance split three ways between spending, saving, and giving;
  • allowance delivery contingent on Ryan meeting basic expectations for his share of the work around the house;
  • the opportunity to make extra money through additional household chores;
  • aggressive compound interest delivered weekly to encourage saving;
  • savings goals for purchases and charitable giving; and,
  • penalties for “not helping the family.”

The Emah Family happens to use the online allowance site ThreeJars (see this side-by-side comparison of online allowance systems), but here’s how Emily and Thompson can set up their “Bank of Emah” for Ryan on FamZoo:

Go to Quick Start for Ryan

After registering the family, Emily and Thompson will see a short series of blue help bubbles on the Overview page. The first will prompt them to add Ryan as a member of the family. That way, Ryan will be able to sign into the “Bank of Emah” separately and check on his own accounts, savings goals, checklists, etc.

After adding Ryan, Emily and Thompson will see a blue bubble prompting them to head over to the Quick Start to get Ryan’s allowance and chore rules all set up.

Follow the Help Bubble to the Quick Start

Pick the Spend-Save-Give Plan to Split Ryan’s Income Three Ways

To match their three-way split policy for Ryan, Emily and Thompson can pick the Spend-Save-Give plan from FamZoo’s list of common configurations. Note: you can split any number of allowances between any number of accounts, but this three-way split plan is one of the most popular, so we’ve made it one of the handy defaults.

Pick the Spend-Save-Give Plan

Pick the Pay-for-chores Option and Fill in Splits and Balances

When Emily and Thompson pick a plan in the upper section of the Quick Start page, the diagram below updates to show how allowances or payments from chores flow into Ryan’s accounts.

Emily wants the weekly $3 payment to be contingent on Ryan meeting “basic expectations” around the house. So instead of setting up an unconditional allowance, she can select the “Pay for chores” option and fill in the name for a chore checklist. The list will be used to track whether expectations are being met by Ryan. Payment will only happen when Emily checks off a box for the week.

Within the upper income box, Emily can fill in the split percentages for each payment — in Ryan’s case: 30% to spending, 40% to savings, and 30% to charitable giving. Within each account box below, Emily can set the name and starting balance.

Pick Pay-for-chores and Fill in Splits and Start Balances

Set the Interest Rate to Encourage Savings

Emily pays Ryan 28% interest on his savings so he can see it build up week to week, even though his balance might be quite low initially. She can use the Compound Interest Calculator in the Savings Account box to set the rate while getting a sense for how much she’ll be on the hook for in the future. She might want to ratchet that rate down as Ryan accumulates more savings over time!

Set the Interest Rate for Savings

Make Payment Contingent on Meeting Expectations

Make Saturday Allowance Delivery Contingent on Fulfilling Expectations

To make Ryan’s weekly allowance payments contingent on him meeting basic household expectations, Emily can head on over to the Checklist page where she’ll find the “Basic Expectations” list she created in the Quick Start. She can add a single checklist item that repeats every Saturday and only deposits a $3 payment if she checks it off. By choosing the Spend/Save/Give split entry in the drop down target list, Emily can automatically allocate the payment across Ryan’s accounts according to her desired 30%/40%/30% rule.

Add Extra Chores And Deductions

Emily can offer opportunities for Ryan to earn more money by adding extra work items to the checklist — like a 50 cent reward for collecting and taking out the household trash. On the flip side of the carrot/stick equation, she can also add an item for a 50 cent deduction that she can check off whenever Ryan’s behavior is deemed particularly unhelpful to the family.

Add Extra Chore Opportunities and Deductions

Check Out Ryan’s Account Transactions Listing

The history and running balance in each of Ryan’s accounts can be viewed on the Transactions page. The history will include deposits for allowance, extra chores, and occasional windfalls like birthday money from grandma & grandpa. It will also include a running record of withdrawals for purchases as well as any behavioral deductions.

Check Out Ryan's Account Listing

Make Savings Goals for Planned Purchases

Ryan can make savings goals for the spinning top toys he loves. He can monitor progress toward his goal from his own dashboard.

Make A Savings Goal for Spinning Top Toy

Project How Long a Goal Will Take

Ryan can see how long it will take to reach a savings goal — like the desire to make a charitable donation to a bicycle-ambulance program in Africa — by using the Savings Planner. If he clicks on the pencil to edit the savings assumptions, he can see how changing the amount saved, working extra jobs, or earning interest can change the end date.

Plan for Charitable Donation

It’s All There on Ryan’s Dashboard

Ryan can see his account balances, his goal progress, and everything else at a glance on his “Bank of Emah”dashboard.

Check out Ryan's Bank of Emah Dashboard

Ready to set up your own virtual family bank with your own policies? Don’t hesitate to contact us if you have any questions or need any help.


How Banks and Credit Unions Can Offer FamZoo For Less Than Zero Dollars

Did you know your bank or credit union can offer an innovative award-winning online youth financial literacy solution from one of the coolest startups in America for less than zero dollars?

Umm, how’s that possible? By sharing revenue with us.

Place a Register Link on Your SiteJust offer FamZoo to your customers or members through a registration link on your site, and we’ll share any ongoing subscription and renewal revenue from your families. You get half. We get half.

How much does it cost your financial institution to get started? Nothing. So, as soon as your first family converts to a paid subscription, you’ve spent less than zero dollars to offer FamZoo — meaning, of course, you’ve actually made money through our revenue sharing arrangement.

Interested? Contact us.

What If You’d Like to Give Your Families Their First Year for Free?

Registration and Conversion ReportIf you’d like to provide some special incentive for parents to get started teaching their kids good money habits, you might want to offer that first year for free by sponsoring your families. If so, you can purchase a basket of prepaid FamZoo subscriptions that can be redeemed by your families using a custom coupon code of your choosing. We offer volume discounts that start at 50% off our $30/year list price. For example, you can start by purchasing a basket of 100 prepaid one year subscriptions for a total of $1,500.

After their free year is up, your families have the option of renewing by signing up for a paid subscription. If they do, you’ll share the ongoing renewal revenue with us 50/50.

Interested? Contact us.

What If You’d Like to Sponsor Your Families for As Long As They Use FamZoo?

Order SummaryIf FamZoo is part of your giving-back-to-the-community efforts, you may want to pick up the tab for as long as your families keep using FamZoo. You can do that by purchasing baskets of discounted prepaid subscriptions just like above, but your families won’t have to enter a special coupon code (although you can require an access code if you like) and they won’t be asked to purchase a subscription.

Note: On each successive anniversary of their registration, your families will be asked to explicitly acknowledge that they’d like to continue using FamZoo. That way, you don’t get stuck paying for families who have since graduated from FamZoo.

Interested? Contact us.

What If You’d Like to Display Your Brand to Your Families?

Co-Brand With FamZooWould you like your financial institution to remain top-of-mind while your families are using FamZoo week-in, week-out over the years? The entry-level “static branding” option of our Partner Edition product allows you to feature your brand in the top banner area as well as along the right sidebar of each page in the application. You can even override visual styles and elements if desired. Just tell us how you’d like things to look, and we’ll make it happen for a modest one-time setup fee.

Interested? Contact us.

What If You’d Like to Schedule Targeted Offers to Your Families?

Your Custom Sidebar AdWould you like to schedule relevant promotions and product offers to your FamZoo families while they’re using the application? Would you like to target your messaging to just the right audience — say, all parents who currently have a child 13 or older? You can do that with FamZoo Partner Edition using our administrative console. You can place your own custom content in the top banner, along the sidebar, and within emails that are sent out to the family (like the weekly account summary email). Furthermore, you have complete control: you can use any HTML markup you like, you can schedule when it appears, you can dictate where it appears, and you can control what portion of your audience sees it — all on your own through our self-service administrative console. Of course, we’re always happy to assist! Access to the administrative console is available for a modest annual subscription fee.

Interested? Contact us.


Moms on Money and Work


Last year, I shared a couple key things my Mom taught me about personal finances. This year, I’ll share a few lessons my Mom taught me about work while I was growing up:

  • All work is noble. My mom always conveyed a deep respect for honest, hard work and enthusiastic appreciation for a job well done. Whether or not the labor was manual made no difference. The pedigree of the laborer was irrelevant. A frequent and indelible image from my childhood was my Mom offering home-baked cookies and refreshments to folks doing work at our house. They were always delivered with a twinkly smile and a heartfelt thank-you. Work is good for the soul and deserves appreciation.
  • The details matter. My wife and I will never forget the image of my Mom using a Q-tip to clean the space between the buttons on our kitchen blender when we were first married. It’s a funny little example of her attention to detail, not to mention her ability to select the right tool for the job! Take a little extra time to do the job right. People notice.
  • Just do it — now. Growing up, my Mom would often remind us that a stack of clothes by the stair meant take’em up and put’em away. I now believe it was a subtle form of conditioning for a critical broader point: if you see something that needs to be done, take care of it — preferably sooner rather than later. When cooking, she’d always remind us: “if you clean up along the way, you won’t have much work to do at the end.” That’s wise advice that extends well beyond cooking.

What did your mom teach you about good work and money habits?

I’ve embedded a list of Mom-Money-Lesson articles from around the web below (also available here. Vote for your favorites. Seen another good post on the topic? Add it to the list.

My Mom was, and continues to be, a fabulous role model for me. That, among many other reasons, is why I love my Mom.

Happy Mother’s Day!


Finovate Winners


The Spring Finovate conference that showcases emerging financial technology just wrapped up this week in SF. We weren’t demoing this time (we launched our FamZoo Partner Edition at Finovate last Fall), so we missed the live show (but we did appreciate the nice CEO Interview coverage on the Finovate blog just beforehand).

Whether you attended the show or not, if you’re looking for a very nice recap with quick thumbnail sketches and insights on each demo, check out this excellent FinovateSpring 2012 live blogging post by Erin McCune. You can also browse the #Finovate tweet stream for interesting (not to mention harsh at times) commentary.

Curious to know who’s taken home the Best of Show accolades each conference since 2007? Here’s a list I put together using List.ly. If you can't see it embedded below or want to access all of the social functions, click here.