10 Good Money Habits to Teach Your Kids in 2014

2013 is coming to a close, and it’s time to make those dreaded New Year’s resolutions again. Pffft! Are you tired of making and breaking the same old promises each year? You know: lose weight, exercise more, quit your favorite vice, blah, blah, blah. Not.

How about switching it up with something new this year? Something that can really change the lives of the people you care most about. Something concrete and doable. Here’s my simple suggestion: resolve to teach your kids good money habits.

Don’t know where to start? Intimidated? Here’s a list of 10 simple habits that will put your kids on the path to financial responsibility:

A Thoughtful Way to Give Kids Cash as a Last Minute Gift

It’s down to the wire, and you need to find a quick gift for a kid. Maybe it’s your own child. Maybe it’s a grandchild, a niece, a nephew, or a godchild. Perhaps it’s the child of a good friend or relative. Think. Think. What’s the easiest last-minute gift that kids of all ages are sure to love?

Money, of course. Duh.

Problem solved, right?

Not so fast. Just giving cold, hard cash feels pretty shallow, doesn’t it? What messages are you sending the recipient? Something like: “Hey, I didn’t have time to really think about you, so I’m sending you a quick wad of moolah. Now run out and spend it on something — anything — OK?”

Yech, that doesn’t feel quite right.

What if there was a truly thoughtful way to give a kid some money? What if there was a way that taught important financial skills and lessons over an extended period of time — like how to be fiscally responsible, how to save patiently, how to give thoughtfully, how to spend wisely, and how to earn diligently. Now, that would be a positive message. One that says: “Hey, I’ve been thinking about how important it is for kids to learn personal finance skills, so I’m giving you money in a way that will teach you the good money habits you’ll need to thrive in the real world.”

Yeah, that feels right. Perfect.

Order a FamZoo Gift Subscription

So how do you do give money to a kid in that way? With FamZoo. Give a gift subscription to FamZoo.com, and, optionally, some starter cash as an initial deposit. What is FamZoo? It’s a virtual family bank that fills the gap between the rudimentary piggy bank and adult-oriented banking products like checking accounts and credit cards. FamZoo supports both IOU accounts and prepaid card accounts. For eligible US families, up to 4 prepaid cards are included in a FamZoo subscription at no extra charge. FamZoo is specifically designed to help parents teach kids good money habits in a hands-on way. Think of it as training wheels for online banking. In other words, you’re giving a kid some money wrapped in an ongoing financial education. Questions? Learn all about FamZoo here.

Buy a FamZoo gift subscription.

What’s the best way to present a FamZoo subscription to a kid or a family? Here are some ready-made printable templates along with some suggestions for how you might fill them in for some common gift scenarios.

Your Very Own Online Bank Account! Love, Grandma

Use our account announcement template to let a kid know she’s receiving money in her very own online FamZoo account, like this:

Click here to download printable template.

Your Very Own Online Bank! From: The Bergmans

Use our bank announcement template to let a family know you’ve given them a virtual family bank they can use to teach their kids good money habits, like this:

Click here to download printable template.

Your Own Allowance Card! Love, Mom

Use our card announcement template to let your son know he’ll be receiving his allowance on his own MasterCard prepaid card that will be arriving shortly in the mail. (See our cardholder requirements first.)

Click here to download printable template.

Your First Payroll Card! Love, Dad

Use our card announcement template to let your daughter know she’ll be receiving her “payroll” on her own MasterCard prepaid card that will be arriving shortly in the mail. (See our cardholder requirements first.)

Click here to download printable template.

Buy a FamZoo gift subscription.

Do those examples match your situation? Do you need a tweak to a template or a different style? Do you have suggestions for improving the FamZoo gift experience? Do you have a fun sample you’d like to share with us? We’d love to hear from you!

Counterbalance Consumerism on #GivingTuesday

For Black Friday, Cyber Monday, and, sadly, even Thanksgiving Thursday, it’s shop, shop, shop; buy, buy, buy; spend, spend, spend.

Sigh. What’s next?

Thankfully it’s #GivingTuesday — today December 3rd — a day that’s all about giving instead of spending. #GivingTuesday is a national campaign to inspire personal philanthropy as we head into the holiday season.

How can you counterbalance the onslaught of consumerism and help your kids participate in the #GivingTuesday movement? Here are a few ideas for FamZoo families:

How to Hide Accounts But Keep the Memories in Your Virtual Family Bank

I love taking the occasional trip down memory lane to look over my kids’ transactions from their earliest financial days. Who knew the $26 toy horse that my then 11 year old daughter bought back on April 13th in 2002 was the precursor to years of competitive riding?

And, oh yes, how about the Neiman Marcus iridescent chiffon gown she bought for the high school prom? I told her she’d regret torching her whole clothing budget on that one, but, hey, live and learn! That “go cold turkey on clothing for the rest of the year” experience was way more effective than any parental lecture from an engineer-geek dad, that’s for sure!

It’s fun looking back, so I don’t want to lose my precious “financial memory lane” accounts. That said, I don’t want to be tripping over them every time I go into FamZoo either!

Jumpstart Your Virtual Family Bank with a TripleGift

Money probably ranks right near the top when it comes to gifts that are well received by kids. No brainer, right? So, what does a kid love better than a wad of money stuffed in a birthday or holiday card you ask? Three wads of money stuffed in a card, of course! That’s what a TripleGift is.

But, wait. It it’s not as crass as it sounds. In fact, it isn’t crass at all. A TripleGift is the thoughtful way to give a monetary gift. That’s because the other two wads of money aren’t for spending. They’re for saving and charitable giving. Each TripleGift greeting card comes with three labeled pouches for spend, save, and share funds. It’s a great way to send a thoughtful, balanced money message to a child on a special occasion: money is about much more than just spending.

So what could be even better than a TripleGift card? A TripleGift card plus FamZoo, of course. Turn that positive TripleGift money message into an ongoing personal finance education. Tuck a FamZoo gift subscription inside your TripleGift card so the recipient can immediately deposit their new funds into spend, save, and share virtual family bank accounts.

Better yet, if you can plan it with the child’s parents, give them the FamZoo gift subscription in advance so they can register their virtual family bank, order spend/save/share FamZoo cards, preload some initial funds onto each, and stuff the FamZoo cards into the TripleGift pouches for the recipient ahead of time.

Interested? To learn more, check out my guest post over on the TripleGift blog.

You can order a TripleGift card here and a FamZoo gift subscription here.

An Educational Gift That Kids and Teens Will Actually Love. Really!

Kids (especially teens) crave independence. Parents love peace of mind. This gift delivers both plus an added educational bonus: financial literacy. Put some financial responsibility in your child’s pocket this holiday season with a FamZoo prepaid card (available to eligible US families).

The FamZoo card is:

• safe - no debt risk, plenty of parental visibility and control;
• convenient - widely accepted online and in stores, always available through your browser or mobile phone;
• educational - full of built-in family finance tools that teach good money habits through hands-on practice;
• no extra charge - the first 4 cards are included in your FamZoo subscription!

Our cards make the perfect holiday gift. In fact, TIME recommends FamZoo as a “meaningful holiday gift for the kids or grandkids” in the article “4 Smartest Money-Making Stocking Stuffers.”

What's the best allocation between spending, saving, and giving for kids?

“Do not save what is left after spending, but spend what is left after saving.”
~Warren Buffett

Smart advice from an undeniably smart investor. The saving (and charitable giving!) should come before any thoughts of spending. How do you make that happen? Automate it. Arrange to have some money automatically set aside from your regular paycheck. Out of sight, out of mind. It’s a strategy that has worked incredibly well for me personally, and something I recommend to all.

Why not start the habit early with kids? If we do, maybe it’ll be second nature by the time they enter the workforce.

“But my kids don’t get paychecks,” you say. Hmmm. What about the money you pay them for allowance, or chores, or odd jobs? What about the money they earn from watching the cat next door or babysitting? What about those birthday checks from grandma and grandpa? Those are informal “paychecks.” Apply Warren’s principle.

Teaching Kids Financial Literacy in the Moment When You're out of the Picture

Financial literacy works best when it’s delivered in the moment on an as-needed basis.

I love that quote by Ron Lieber from his interview with J.D. Roth.

I’m convinced that good money habits stick as a result of numerous repeated nudges rather than a few epic lectures or various other “one-and-done” type educational efforts. If we can take it one step further and interject those little nudges into our kids’ everyday financial moments, I think we’ll really be on to something when it comes to having a lasting impact on behavior.

Email Money to a FamZoo Card for Free Using Square Cash

Darn! Looks like the party and all the magic is over (at least for now). As of October 27, 2013, Square does not appear to be allowing customers to link our MasterCard prepaid debit cards anymore. We have an inquiry into Square’s customer support to find out the details and whether support will be re-enabled in the future. I’ll update this post as soon as we hear back.

You and the kids have FamZoo prepaid cards, and everyone wants to send you money.

• Grammy Jane wants to shoot some weekend shopping money to Haley.
• Mrs. Laurence next door wants to pay Quintin for feeding the dogs while they were away last week.
• Uncle Mark wants to put a quick birthday bonus on Payton’s card.
• Will needs an easy, convenient way to get paid for his odd jobs around the neighborhood.
• You even want to send yourself money — moving funds from your checking account to your parent funding card.

What if it were as simple as sending a quick little email? Like this:

How to Stay Alert About Activity on Your Family's Prepaid Cards

“Sheesh! Evan just spent over $15 at Chronic Tacos. We need to talk about that junk food habit. We’ve got plenty of good food at home that wouldn’t cost him a dime.”

“I just earned 21 cents in interest from Mom for the week. Sweet! It pays not to spend the money on my card.”

“Busted. Dad just dinged me a buck for not making my bed this morning. I gotta shape up!”

“My weekly allowance just arrived. Now I have $54.21 on my card. I’m over half way to my savings goal!”

“What’s Haley doing buying ice cream at 2:41 today. I thought she had soccer practice at 2 o’clock...hmmm.”

“10% of my allowance just went to my giving card. It’s at $25.33. I should make a donation on RedCross.org today.”

“I see Dad ran short of funds for my allowance payment just now. Sure glad FamZoo automatically tracks that as an IOU so I don’t have to remember to bug him about it.”

A Teacher Banks on FamZoo to Make Math Real in the Classroom

Interviewer: “Do you like math in school?”
Alison (3rd Grade): "I would like it if it were interesting."

Sadly, that exchange from a What Kids Say About Math video is all too familiar:

For many kids, math equals boooooring. It’s abstract and lifeless.

So, how can teachers make math come alive for kids in the classroom?

Michelle Reel, a 6th grade math teacher in Indianapolis, figured it out. She runs a “mini-economy” in her classroom. You see, money is always...well...interesting. No kid ever nodded off in class while buying stuff and counting money.

There’s one hitch though: the banking piece of the economy is a hassle. That’s why, back in May, Michelle wrote to us:

You Should Teach Your Kids About Money This Way...Or Not

Parents, do you cringe when you hear a sentence beginning with “You should...” coming your way? Someone is about to hit you with their sage advice on how to raise your kids. Oof. No matter how well meaning the intentions, such assertions are inherently presumptuous about your family’s unique situation. Christine Bader wrote a wonderful post about “You Should” encounters today. Stick with stories instead. Tell a mom (or dad) what you did in your situation, not what she should do in her situation. As Christine says:

“Stories are much more powerful than recommendations.”

Let the recipient decide how to apply or adapt your story...or not. Amen. That’s something we can all keep in mind when talking to others about teaching kids good money habits.

So, how should you teach your kids good money habits? I don’t know, but here are some good stories to consider:

Getting Started with Your Prepaid Card Family Pack

So, you’ve heard about FamZoo’s “family pack” of prepaid cards. You love the story:

• Multiple linked cards for one low fee.
• Instant, free transfers between parent and child (sub-)accounts.
• Safe purchasing/donation power for kids.
• Lots of visibility and control for parents.
• Online and mobile access for each family member.
• Tons of built-in family finance tools that teach kids fiscal responsibility.
• No risk of running up debt.

You’re ready to take the plunge (and you meet the eligibility requirements), but you’d like to see exactly what the ordering experience looks like before you commit.

This post is for you. Prefer watching to reading? Watch this video instead.

The High Level Steps

The high level steps are simple:

1. Order your cards.
2. Activate your cards.
3. Set up your “bank” rules for allowance, chores, extra jobs, parent-paid interest, etc.

I describe each step in more detail below. And, to top it off, I include a slide show at the end with comprehensive screen shots so you know exactly what to expect.

The American Dream vs. The Me Dream: Family Finance Picks #75

“Life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.”

That’s a definition of the American Dream supplied by James Truslow Adams in 1931. The American Dream is the common thread running through this week’s family finance picks. Read on to delve into these deep family finance questions:

• Are today’s 20 somethings engaged in the American Dream or the Me Dream?
• How do we encourage the spirit of entrepreneurialism in our kids that is so central to the notion of the American Dream?
• Is our society even equipping kids with the basic financial capabilities required to participate in the American Dream?

How to Install FamZoo Mobile on Your Android Device

The FamZoo mobile user interface works great on Android phones. In fact, I use it every day on my Samsung Galaxy S4. The trick is getting things set up so you can conveniently launch FamZoo with one tap from your home screen. You see, unfortunately, we don’t have a FamZoo app in the Google Play Store just yet, so you’ll want to follow this one-time recipe to “install” FamZoo on your Droid.

The Quick Recipe

The high level recipe is simple and consists of these three steps:

1. Sign into FamZoo on your mobile browser.
2. Create a bookmark.
3. Add the bookmark as a shortcut to your home screen.

Experts Answer Your Allowance Questions: Family Finance Picks #74

This week’s picks feature classic allowance Q&A, pearls of money wisdom from mom and dad, and a tough question for parents of sporty kids from Pete the Planner.

Give Your Child Financial Perspective with Savings Goals: Family Finance Picks #73

One of the easiest and most effective ways to give your child some much needed financial perspective is to have them make a savings goal. That common theme runs through each of this week’s family finance picks:

Sowing Frugal Habits in Our Children: Family Finance Picks #72

You’d be hard pressed to find parents who don’t want their children to enjoy the liberty of financial independence. So what’s the best way for parents to maximize the chances of that outcome? Perhaps the secret can be found in these wise money words from a great king of Sparta:

“By sowing frugality we reap liberty, a golden harvest.”
—Agesilaus

Each of this week’s family finance picks contributes thoughtful insights on how we can start sowing frugal habits in our kids so they can reap the benefits in adulthood.

Beyond 7 Minutes at the Disneyland of Fintech

Finovate, the Leimer-dubbed Disneyland of Fintech, was the first demo-focused conference in financial technology. It’s now in its sixth year and going strong. Finovate issued their Second Quarter Report over the summer on the heels of the Spring 2013 show in San Francisco and leading up to the (sold out) Fall 2013 show in New York City. The report features FamZoo in the Best of Show section and includes the following interview with yours truly to discuss a few topics beyond what could be gleaned from our 7 minute demo.

The Interview

We chatted with FamZoo CEO and Founder Bill Dwight to ask him a few questions about FamZoo’s new Prepaid Card Family Pack:

Q: Why did FamZoo win Best of Show?

Dwight: Because everyone loves Justin Bieber, right?! OK, maybe not... (If you don’t know what I’m talking about, then check out the opening sequence in the demo.)

Seriously, though, I’d say the key reasons are:

Altruistic High, Tooth Fairy Finance, Teen Prepaid Card Ideas: Family Finance Picks #71

Interesting new brain science behind charitable giving, inflationary tooth fairy payout statistics from VISA, and a Mom’s clever ideas for prepaid card usage topped the list of interesting family finance articles last week. Here’s the roundup with links for deeper reading:

Hard-Wired for Giving

by Elizabeth Svoboda on The Wall Street Journal

Get your kids “high” on..... charitable giving! Sounds a bit wrong, but check out these new science findings.

Survival of the fittest! Darwins famous findings taught us that humans are hard-wired to out-compete others for the best mates and the most resources to perpetuate their genes to future generations. So why do we bother to help others? Is it just a Darwinian extension to help ensure survival of close kin or the broader tribe?

It appears to be more than that. According to new brain studies, it looks like we’re hard-wired not just for survival, but for altruism too. The bottom line: altruistic decisions give us a “buzz”. More scientifically speaking, fMRI data shows that the decision to donate to charity lights up the nucleus accumbens area of the brain which contains neurons that release the pleasure chemical dopamine.

Finally, a “drug” we don’t have to worry about our kids getting hooked on: charitable giving.

Related FamZoo Activity: Make a charitable giving goal.
Discuss on FaceBook.

Vanity vs Virtue, FinLit As Parental Love, Frugal College Tips: Family Finance Picks #70

This week, my favorite family finance picks are:

What is Your Twist — Kim Kardashian or Ozzie Nelson?

by Sam Renick on Sammy’s Save & Song Club

Sam highlights three recent vanity stories that are great fodder for meaningful money and values conversations with kids. One interesting discussion angle might be alternative uses for the same amount of money. For example, in the Kanye West and Kim Kardashian case: $750,000 buys four gold plated toilets, and it also buys 75,000 malaria preventing mosquito nets. Hmmm. The Cervantes quote comes to mind: “The gratification of wealth is not found in mere possession or in lavish expenditure, but in its wise application.”

That said, many folks who purchase high end luxury items are also extremely generous and hard working, so Sam’s point about taking care not to pre-judge is a great topic too.

Discuss on FaceBook.

Treating Your Kids Without Spoiling Them

Like most parents, I like to treat my kids: occasional movies, ice cream, the candy shop, that kind of stuff. I also like to emphasize the value of a dollar and encourage moderation. So how do you do both at the same time?

Here’s a technique I like to use:

• Set a quick budget for the outing. No tedious haggling, or the deal is off!
• Parent covers the budgeted amount.
• Spend more? Kid picks up the difference.
• Spend less? Kid pockets the remainder.

Simple. Effective. Even educational. The experience invariably leads to interesting discussions about things like comparison shopping, impulse buys, buyer’s remorse, pricing, relative value, marketing, etc.

How to Load Your Prepaid Card from Wells Fargo

Do you bank at Wells Fargo but also use prepaid cards for your kids or for envelope budgeting purposes? If your prepaid cards have account and routing numbers, it’s easy to load them directly from your Wells Fargo checking account using a browser or your mobile phone. (Don’t bank at Wells Fargo? No worries. The steps are very similar at most banks and credit unions, so read on anyway.)

Here’s an outline of the steps:

1. Find the account and routing numbers for your prepaid card.
2. Add your prepaid card as a Non-Wells Fargo checking account in Wells Fargo Online.
3. Initiate the account verification process which involves Wells Fargo making two small trial deposits to your prepaid card and then reversing the deposits with one withdrawal.
4. Check your prepaid card for the trial deposit amounts in a few business days.
5. Enter the trial deposit amounts back in Wells Fargo Online to complete the verification process.
6. Make transfers from your checking account to your prepaid card using Wells Fargo Online or from the Wells Fargo mobile banking app. Each transfer typically takes about 3 business days and is free. An expedited transfer incurs a fee of a few dollars.

Note: If you have FamZoo prepaid cards and you’d like to investigate other card loading options including instant and free options, see here.

Here’s a detailed look at each step with screen shots so you’ll know what to expect along the way:

Chore Monster Meets Money Management

So you’re intrigued by the idea of using a fun, point-driven gaming experience to turn your youngsters into eager household workers. Kids doing chores without whining. What parent wouldn’t love that?

But you’re also drawn to the idea of using a virtual family banking system to teach your kids critical money management skills while they’re still young. “Start early,” experts admonish parents. Set your kids on an path to financial independence as soon as possible. What parent wouldn’t be on-board with that?

Why not do both?

It’s easy. Use ChoreMonster and FamZoo together to develop good earning, spending, saving, and giving habits. Parents can deliver monetary rewards for completed chores in ChoreMonster as deposits in FamZoo’s virtual family bank by crediting their kids’ IOU accounts or prepaid cards. The funds earned through chores serve as the basis for your kids to make real world spending, saving, and giving decisions. They’ll learn good money habits through hands-on practice and your ongoing guidance.

Here are the steps in a nutshell:

1. Parents register.
2. Parents add kids.
3. Parents add chores.
4. Parents add rewards — including monetary ones that map to deposits in FamZoo.
5. Kids do chores for points.
6. Parents approve work.
7. Kids redeem points for rewards.
8. Parents approve and deliver rewards.
9. Kids learn by doing.

Let’s take a more detailed look at each step:

Register

First, you’ll need to register your family on ChoreMonster. Visit ChoreMonster.com. Click on the Sign Up Now button, and fill in the parent registration form. You’ll be asked whether you’d like to upgrade to a paying plan. You can see the cost/benefit comparison in this screenshot of the membership page. You can always start with the free plan, and upgrade later if desired.

If you’re also new to FamZoo, you can learn about our virtual family banking system and sign up for a free trial here.

Add Kids

Create an account for each of your kids by choosing Add A Child from the drop down list at the top of the parent page. Fill in the form to assign your child an individual username and password.

Add Chores

Each registered child has three tabs on the parent dashboard: one for chores (the clock icon), one for rewards (the money bag icon), and one for settings (the pencil icon). Click the chore tab to add new chores for the currently selected child. You can review and edit existing chores on the same page.

Add Rewards

Defining rewards works just like defining chores. Just click on the rewards tab (the money bag icon) to add a new reward and to browse or edit existing ones.

To add a monetary reward, decide how you want ChoreMonster points to map to real money. For example, 100 points in ChoreMonster might translate to a $1 deposit in FamZoo. If your child is racking up points rapidly, you may wish to add a few more monetary rewards at higher denominations (say, a $5 deposit for 500 points, a $10 deposit for 1,000 points, and so on).

Kids Do Chores for Points

As your kids perform chores, they sign into their ChoreMonster accounts to check off the completed items. The (alledgedly!) completed items go into the “Waiting for Mom/Dad” state until you explicitly approve the work to award the corresponding points.

Parents Approve Work

You’ll get an email notification for each completed chore. Click on the link in the email to go to a page in the parent interface with a list of chores that need your review. You can approve completed chores individually or all at once.

Kids Redeem Points for Rewards

As the completed chores are approved, kids rack up points. They can visit the Points & Rewards tab within the child interface to see what rewards can be redeemed for the current point total. Selecting a reward decreases the point balance and initiates a request to the parent for approval.

Parents Approve and Deliver Rewards

You’ll get an email notification for each reward requested by your child. Click on the link in the email to go to a page in the parent interface with a list of awards that need your confirmation. If you approve a monetary reward, deliver it by visiting FamZoo and making a credit for the indicated amount in your child’s account. If you’d like to split the deposit between multiple accounts — say, spending, saving, and giving — then look for the Split Credit link.

It would be cool if we could automate this deposit step so parents would not have to pop into FamZoo when delivering rewards. If you’d like to see that happen, then visit this discussion in the ChoreMonster support forum and give it a +1.

Kids Learn by Doing

ChoreMonster helps parents teach kids the connection between hard work and rewards. As they build up earnings from their efforts, FamZoo encourages kids to spend wisely, save patiently, and give thoughtfully. Good habits are forged by consistent, hands-on experience.

Got young kids? Give the combination of ChoreMonster and FamZoo a try, and let us know what you think.

Got older kids? You might consider FamZoo’s built-in chore checklist capability with it’s calendar-centric interface, direct integration with the virtual family bank, chore penalty options (handy for the inevitable “TeenMonster” years!), and the trust-but-verify approach without explicit approvals. See here for more info.

Where Are the Bank Routing and Account Numbers for Direct Deposit to My Prepaid Card?

Some prepaid cards — like the ones offered by TransCard and FamZoo — have associated bank routing and account numbers. Why is that useful? You can use that information to set up direct deposit right to your prepaid card. This means you can accept paychecks from your employer, transfers from another bank account, refunds from the IRS, and more — all delivered directly to your prepaid card. Cool.

For example, my teenage son had a tax refund coming from his summer job. Since his prepaid card has bank routing and account numbers, we were able to provide that information to TurboTax and have his refund delivered right to his card via direct deposit. Now that’s a serious motivator for a teen to learn how to prepare a tax return. Sweet!

Where do you find your card’s direct deposit bank information? You should be able to find your card’s routing and account numbers on the printed information that comes with your card when you first receive it. In the case of your FamZoo card, look for the Direct Deposit Form at the bottom of the page to which your card is attached. You’ll find the routing and account numbers in the lower right corner of the form as shown below.

Note: As of the transition to our new chip based cards in December 2020, the routing and account numbers are no longer printed on the paper card carrier. Instead, you’ll find them online on the Card Information screen.

Important note: your prepaid card’s 16 digit bank account number may not be the same as the 16 digit number printed on its face. Even more confusing, the name of the bank associated with the direct deposit routing number may be different from the issuing bank that is printed on the back of your prepaid card. To find the name of the bank associated with the routing number, you can just Google it with a search like: “routing number 111924680”.

So, before you sign up for a teen prepaid card, be sure to confirm that it supports direct deposit. It’s a super handy feature. Who knows? It might even spur your child to go get a summer job and prepare her own taxes!

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

Last 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.]

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.]

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.]

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.]

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!

[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.

[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.

[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.]

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.]

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.]

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.]

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.