A Teen Reflects On a Decade of Spending

New Year ReflectionThe end of the year is a great time for some quiet reflection. Take stock of the important areas in your life — including financial — to provide a little perspective and priority before jumping into resolutions for the New Year.

Like good money habits, the habit of periodic introspection is an excellent habit to start developing early in life. In that vein, this teen guest blogger — who happens to be one of my sons — looks back on a decade of financial behavior.

Once upon a time — 1,086 transactions ago to be precise — my FamZoo experience began. June 16, 2002, marks the beginning of an eye-opening evolution of 50 cents. My humble beginnings of a “gumball” here and a “superball” there (8/10/02) soon transformed into a pattern of impulsive behavior.

Teen Reflects on Decade of Spending

TransactionsI’ll be honest with you, I don’t even know what the “Adventures of Bleeposaurus” means, but apparently it was worth dropping $15 on in 2003. We also can’t forget the heavy toll of a “broken window” the same year (11/01/03) — typical me. But hey, if I could milk my father with back-scratches in exchange for a few dollars, why not take advantage of the extra moolah?

But then it happened, with the devastating combination of both Halloween and sports video games, my bank account dipped into the negative. In 2004, I learned not to spend more money than I had. Unfortunately, that’s literally all it taught the young me because I still had no problem emptying my balance to $0 with a purchase. With allowance and “good behavior during babysitting” fueling my small, yet growing spending account, I managed to save up a decent amount of money. With a little bit more from picking up the yard and washing the car, I made the infamous “Heelys purchase.”

That pair of Heelys roller shoes is undoubtedly my most recognizable purchase, not only because it drained all my funds in one fell swoop, but because it was simply a dumb and impulsive act of squander. Sure, they were enjoyable for a little while, but it was a foolish purchase in the long run considering the cost.

Heelys Purchase

Apparently I was also a punk, racking up some penalties with “rude talk to others” (9/25/05). In 2005, I learned not to make impulsive decisions and not to be a punk. Just kidding, I didn’t absorb either lesson at the time. To this day I still do both, but I make sure I still have money left over after a purchase. For your enjoyment, I bought “Heelys” again in 2007; effectively halving my balance at the time. Whoops!

From 2007 to 2011, I would say my behavior wasn’t too shabby. I saved up and spent money on movies with friends, lacrosse sticks, and video games. The most regrettable purchases being all the money I spent on video games, but so goes the story of a dolt; and admittedly, I still do occasionally spend money on games.

At this point in my journey (2011), I learned to not be so impulsive, save my money, and respect the role it plays in the world. I still waste money here and there, but I understand the significance of my actions and guiltily accept my behavior at these times.

In 2010, my father gave me a loan for half the price of a MacBook Pro. I understand how fortunate I am to have this computer and take advantage of my blessings. I keep very good care of it, and besides the issues it was manufactured with (known problems!), it’s still in pristine condition. While paying off the loan, my allowance would split into four accounts: General Spending, Long Term Savings, Charitable Givings, and Computer Loan. Paying off the MacBook Pro taught me how to respect my property, understand loans, and appreciate my money.

Loan Repayment

In the current year of 2012, my money handling thus far has been good, but not great. One potential mistake is a “mini longboard” purchase I made over the summer. I used it, but not to the point where I felt it was worth the cost I payed for it. One certain mistake is the continued payment on video games; but at least I maintain a healthy amount of money after each purchase and space out my impulsiveness.

All this reflection is made possible by the Account Transaction tool built into Famzoo. Being able to look back upon my account history is really fascinating. Every single debit and credit, with its date, is captured and recorded for viewing purposes. I can’t tell you how many times I cracked a smile, laughed, and face-palmed looking over my spending habits. Having a graphical version is also interesting because it provides a visual representation of big purchases and the effect it has on one’s balance.

I believe it’s been extremely beneficial for me to see my spending habits and learn from my mistakes and I am certainly pleased with my financial development over the years. Famzoo has taught me through experience how to manage my money, use my money, respect money, and learn from my purchases.

Guest post by P. Dwight


Do Online Allowance Sites Impede Meaningful Money Talks With Kids? Family Finance Picks #68

Allowance On Auto Pilot. Good or Bad?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.

MintFamily with Beth Kobliner: Allowance on Autopilot

The article that sparked the commentary above.

Discuss on FaceBook.

A Virtual Bank for Kids’ Allowance

The recent public radio Marketplace segment in which Suzanne Skyvara describes how she teaches her kids good money habits with FamZoo, and Beth Kobkliner expresses her skepticism.

MintFamily with Beth Kobliner: Allowance, ‘Modern Family’ and My Family

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.”)


Allowances Don't Spoil Kids, Parents Do. Family Finance Picks #67

Last week, Dan Kadlec invited me to chime in on the “allowance debate” for his article in TIME Business & Money:Kids and Allowance: The Debate that Divides Us. I was honored to be included alongside some of the most prominent names in personal finance (Suze Orman, Dave Ramsey, Jean Chatzky, Janet Bodnar), and I was relieved to be grouped in the “thoughtful” corner (I can just see my kids rolling their eyes now).

Here’s my stance on the allowance debate — most of which Dan was nice enough to include in the article verbatim:

FamZoo Featured in TIME Business & MoneyI find the allowance debate to be a diversion. To me, the far more crucial thing is practice — early and often. I think it’s critical for parents to make sure their kids get regular hands-on experience making real spending, saving, and giving decisions with a modest, constrained supply of their own income. I don’t think the specific source of that income (unconditional allowance, chores, outside jobs, or a hybrid thereof) is hugely important — as long as it’s thoughtful, consistent, clearly communicated, and in line with the family’s values.
Furthermore, the appropriate source and amount of that income varies with age. As kids mature, they can manage spending for more than just little occasional “wants” and start tackling budgeting and expense tracking for specific needs — like clothing. Over time, they can also be expected to kick in more and more income on their own from outside work.
My bottom-line advice to parents: don’t let agonizing over the allowance vs. chores debate get in the way of getting your kids started with hands-on money practice — pick an approach, get started, and tweak it over time.

Beyond the compliment of being included, I was particularly pleased to see Dan cast a critical eye on the Mandell research that purportedly shows an inverse relationship between receiving an allowance and developing financial aptitude. The less discerning journalists tend to just run with a link-bait headline like “Allowance Does More Harm Than Good” and then couple it with a fluff piece sans any meaningful analysis. A more accurate headline that more closely matched the findings would really read something like: “Thoughtlessly forking over an allowance with no discussion or guidance probably won’t teach your kid good money habits.” No, duh.

My feeling: Allowance isn’t the problem, but parents might be. Allowance is just one simple tool (among many) that parents have at their disposal. If parents are thoughtfully delivering a modest allowance as a way to give their kids regular practice managing a constrained financial resource (also know as operating within a budget), I can’t fathom how that would inhibit the development of their financial aptitude. If the “research” shows otherwise, I’m inclined to think there are other factors at play that are skewing the results (see section 2 of this post for more thoughts on such studies).

Allowances Don't Spoil Kids. Parents Do.

Kids and Allowance: The Debate that Divides Us

Dan Kadlec covers all the “expert” (present company excluded!) angles on the ever polarizing allowance-for-kids debate: no allowance ever vs. pay for chores only vs. allowance as a budgeting tool.

Discuss on FaceBook.


Your Kid's Allowance Isn't Just About Spending: Family Finance Picks #66

Typically, when parents hear “allowance”, parents think “spending”.

In the worst case, allowances fuel more spending. Thoughtless parents unconditionally shower bloated sums on their entitled kids who rush out to satisfy their “wants” on the latest consumer-driven fads. Instant gratification. Profligate spending. Ugh.

In the best case, allowances constrain spending. Modest sums are saved week after week by patient kids who deliberate over their eventual purchases, weighing the pros and cons of each. Delayed gratification. Disciplined spending. Good stuff!

But there’s another word I wish allowance would more readily evoke: “giving”. Allowance can be a great tool for introducing your kids to philanthropy, and cementing a lifelong habit of charitable giving. Here’s how you can get started today:

Pick a giving goal. Sit down with your child and pick a charitable giving goal that matches her interests and means. Need some ideas?

Pick a Giving Goal
  • I’ve written about DonorsChoose before here. Your kids can help students in need by helping to fund projects posted by public school teachers across America.
  • Lots of FamZoo families recommend the microfinance non-profit Kiva. Individuals can lend as little as $25 to help create opportunity around the world.
  • Our kids recently pooled their charitable account funds and made a donation to Sandy storm victims via the Red Cross.
  • In Mark Hurst’s 2013 Gift Guide, I read about a more personal way to reach out to Sandy victims through the organization Family-to-Family.

Want more ideas? Check out pick #1 below.

Make a fund-raising plan. Help your child work out a gameplan to raise the funds for the donation. Here are a few ideas to mix ’n match: set aside a portion of allowance, tackle some odd jobs, hold a fund-raising event, or convince mom or dad to kick in some matching funds.

Make a Fundraising Plan

Track progress. Review progress each week with your child. Fine tune the plan along the way if things are getting off track.

Track Fundraising Progress

Create a memorable giving moment. When your child donates her own hard-earned money to a cause, it invariably creates a strong sense of fulfillment and pride. It’s a powerful moment. Reinforce it. See picks #2 and #3 below for two recent examples of memorable giving stories involving young philanthropists.

#GivingTuesday: Ideas for Families

There are lots of neat family philanthropy ideas in this article that came out as part of the #GivingTuesday campaign this year. Here’s what that campaign is all about:

#GivingTuesday™ is a campaign to create a national day of giving at the start of the annual holiday season. It celebrates and encourages charitable activities that support nonprofit organizations.

Related FamZoo Activity: Make a family charitable checklist for 2013.
Discuss on FaceBook.

Rochester Girl Spends Allowance on Statue for Vandalized Museum Garden

I love this story about a 4th grade girl’s generosity with her allowance.

Discuss on FaceBook.

Put the ‘Giving’ Back in Thanksgiving

A wonderful Thanksgiving story from Neale Godfrey showing how an allowance empowers a child to not only spend, but give.

Related FamZoo Activity: Split your child’s allowance as suggested by Neale.
Discuss on FaceBook.

When used properly, allowance can be a great tool for helping kids make a habit out of both disciplined spending and thoughtful giving.

Good luck and happy giving!

We’re constantly scouring the Internet looking for articles related to family finances and teaching kids good personal finance habits. You can visit our ever growing list of family finance bookmarks here. We’re up to 3,024 now!