5 Family Savings Resolutions for the New Year

Prepaid card accounts and bank sub accounts are perfect for automatically building up little “buckets” of savings. Family members young and old can set up automatic deposits, allowance splits, or transfers that drip funds into special purpose accounts week after week. Just set it and forget it. After a while, you’ll have much more than a drop in the bucket.

Here are 5 savings buckets to consider setting up in your family as you kick off the new year:

Ditch the Gift Card! A Better Money Gift for Your Kids, Your Spouse, Your Friends, and Your Tribe

It’s crunch time for that last minute holiday gift. So you reach for the old stand-by: the gift card. You’re in good company: over half of holiday gift-giving consumers do the same. Definitely not an original idea. Not only that, your money may end up being wasted. An estimated $750 million in gift cards will go unused this year. Lame.

There’s a better way to give someone money on a card that won’t be wasted, isn’t tied to a single merchant, and isn’t just a one-and-done proposition (or perhaps even a none-and-done proposition considering that $750M stat). In fact, there’s an alternative that can actually encourage good money habits for years to come.

15 Quotes to Inspire Less Spending and More Giving

Today is Giving Tuesday — an international day of giving that falls right on the heels of Black Friday and Cyber Monday, which are apparently our unofficial national days of mindless spending. Giving Tuesday is a refreshing counterpoint to consumerism. That makes it the perfect trigger point for a family discussion about philanthropy.

Reading this after December 2? No worries. Any day is the perfect day to start a discussion about charitable giving with your kids.

Need a conversation starter? Try these 15 great quotes on spending wisely and giving thoughtfully:

Why Is the Stock Market Your Kid's Friend? Family Finance Picks for November 2014

Are you stuffing your child’s savings in a bank account because you’re afraid of the stock market? If so, what do you suppose the annual return after inflation will be? Minimal. In fact, it may be negative.

Whether you’re a millennial or not, you might want to check out this excellent article in the Wall Street Journal: The Market Is Your Friend. Really: A Millennial’s Advice to Peers. First, it explains why the fear that millennials (and perhaps you) have about investing in the stock market is quite understandable. Second, it explains why they (and perhaps you) really need to get over it! The bottom line: 6.8%. That’s the average annual return after inflation that the stock market has earned since 1871, and that’s in the face of 29 recessions, 1 Great Depression, 2 world wars, and plenty more disasters. If you’ve got time on your side, you’re going to be hard-pressed to find a smarter long term investing strategy than a low cost US stock market index fund. And, fortunately, time is one thing your kids have in spades!

3 Tips for Unleashing Your Kid's Inner Entrepreneur

Take a look at your beautiful child. Now, close your eyes. Imagine your child 20 years from now in a professional setting. What do you see?

Is he an anonymous corporate drone slouched in a desk chair hidden among a vast sea of cookie-cutter cubicles? Is he sheepishly cowering before The Boss? Is he bored, uninspired, counting the seconds to 5pm? Is he playing it safe in a dull job while secretly dreaming of running his own show?

Or...

Is she huddled with her team to brainstorm on the latest killer idea? Is she her own boss taking charge of her own destiny? Is she motivated, inspired, waking up early to put her great ideas to work? Is she taking calculated risks and bouncing back from inevitable setbacks as she turns her professional dreams into reality?

I’m betting it’s more like door number two.

Now, connect the dots. Is there something you can do as a parent to help open that door for your child? Perhaps you can plant the seed by giving your kid an early taste of the entrepreneurial spirit. How? Help your child launch a micro-business.

Are you game? If so, here are three suggestions to keep in mind.

Young Parents Earn Baby Bucks for Learning Life Skills

We’re always delighted to work with non-profit organizations who help families develop critical life skills. The Family Resource Centre on the Island of Grand Cayman is one of those wonderful organizations. Through its Young Parents Services program, clients bring their babies with them to the center four days each week where they participate in presentations, take educational online classes, learn about helpful parenting tools, and receive interactive parenting advice. The program promotes healthy lifestyles and habits to help equip the young parents with the skills they need to have a successful, well-rounded family and professional future.

Personal finance is clearly one of those valuable life skills, but how does FamZoo fit in when the kids involved are just babies? It’s not for the kids. It’s for the parents. Carlie Rowell, a program support worker, explains:

If Your Net Worth Was Pasted on Your Forehead and Other Top Family Finance Picks for October 2014

What if your net worth was pasted on your forehead for all to see? Would it change the way you spend? Would you still see people buying cars costing more than what they have socked away for retirement?

For an interesting reflection on the taboo subject of money and how the outward appearances of wealth don’t always match reality, read Carl Richards’ article in the New York Times: Living Your True Wealth. The article should spur some excellent discussions with your kids. I love Carl’s napkin graphic too featuring one of my all-time favorite phrases: “Big hat; no cattle.”

Here are my other favorite family finance articles for the month of October:

The Best Family Finance Articles for September 2014

We’ve been scouring the web for good family finance articles all month and posting them on the FamZoo Facebook page.

Here are the very best ones from the month of September:

7 Practical Tips for Raising Money Smart Kids

What are my favorite practical tips for raising money savvy kids? Personal finance writer Karen Cordaway asked me that very question earlier this month. She was putting together a family finance piece for U.S. News that just came out today (4 Fun Ways to Teach Your Kids About Money). It features two of my seven favorites: budget-based allowances and parent-financed loans.

Here’s the full list:

The Best in Family Finance - August 2014

If you hang out on our Facebook page, you already know we review boat loads of articles on family finance each month so you can concentrate on just reading the good ones! And if you just want to peruse the very best ones, you’ll always find them here.

The top family finance picks for August?

Turn Your Teen into a Shopping Errand Machine

Usually the combination of a teen, a car, and money is enough to scare the daylights out of any parent. Here’s how to turn that terrible trifecta into a big win: send your teen on shopping errands for the family. It gets your teen off the couch. It saves you time. It provides plenty of opportunities for teachable money moments — like how to comparison shop.

Win. Win. Win.

Here’s an extra bonus for families with FamZoo prepaid cards: we just made the whole “Mom/Dad, can you pay me back for the stuff I just bought?” routine super-simple by building in some new app(lication) features dedicated to streamlining reimbursements between family members.

For example, just this week, my wife sent our son, Will, on a grocery errand to pick up some grillables for the family dinner.

Here’s the expense as it appeared on Will’s Transactions page in the FamZoo app:

Naturally, Will wants to be repaid — and pronto. So, he taps on the arrow just beneath the amount to get to this Request Reimbursement form:

How to Offer Extra Job Opportunities to Your Kids

Diane, a FamZoo mom, sent us the following question:

I would like to just supply a list of chores (with an associated value) that my kids can do whenever they want and do them multiple times. So, I would put ‘one load of laundry=$2.00’ and each time they do a load of laundry they would get $2.00 deposited. They might do two loads one day, none the next, one the day after, etc. Is there a way to accommodate this?

Setting up a checklist of optional extra jobs that kids can knock off from time to time to earn some extra bucks is a popular technique among FamZoo families. Parents pull it off using the rewards, repeat frequency, and expiration options of FamZoo checklist items.

Here’s how you can set up Diane’s laundry job opportunities:

How to Put the Squeeze on Your Fattest Money Habit

What’s your fattest money habit?

Come on, you can be honest. Everybody has at least one discretionary spending indulgence that deserves a good belt tightening. Dining out? Clothing? Entertainment? Online shopping? Morning lattes?

It’s easy for those discretionary expenses to get lost in the noise of all your other transactions. By the time you tally everything up at the end of the month (assuming you’re doing that — wink, wink, nudge nudge!), even that seemingly innocuous habit can add up to a big number. The damage is done. As Ben Franklin wisely said: “Beware of little expenses; a small leak will sink a great ship.” So, you vow to reform next month, and the next month, and...

How do you break the cycle? Here’s a very simple recipe for isolating and trimming your fattest money habit.

Smart Money, Smart Kids: Brilliant Blueprint for Teaching Your Kids Good Money Habits

As the founder of a money management site for families, I’ve been studying and implementing strategies for teaching kids good money habits full time since 2006 (and as a father of 5, I’ve been dabbling in the area long before then). Suffice it to say, I’ve read just about everything written on the topic of kids and money. After reading Smart Money, Smart Kids by Dave Ramsey and his daughter Rachel Cruze, I can confidently say it’s now among the top two on my recommended reading list for parents (the other being The First National Bank of Dad by David Owen).

Smart Money Smart Kids is wonderfully practical and thoughtful. Its concepts are conveyed through real stories that keep the text engaging and memorable. Even if you don’t consider yourself a Dave Ramsey devotee (I’ll admit that a few of his stances drive me crazy) or you aren’t coming at this from a Christian perspective, you’ll get a lot of value out of 99% of this book. At minimum, reading the book will force you to systematically think through how you are teaching (or plan to teach) your own kids about money at each stage in their development. I guarantee you’ll find the book helpful if you’re interested in teaching your kids good money habits.

Some of my favorite themes from the book include:

4 Big Things Your Teen Can Save For

When it comes to big expenses, most of us parents are giving our teens too much credit and too little credit, all at the same time. How so? On the one hand, we’re giving our teens too much credit (in the form of dollars) by covering big ticket items for them — often when we can’t even afford them ourselves. On the other hand, we’re giving our teens too little credit (in terms of respect for their capabilities) by assuming they can’t handle paying for at least a portion of these major expenses on their own.

This dawned on me last week while reading Smart Money, Smart Kids. (Why am I reading the new book by Dave Ramsey and his daughter Rachel Cruze? See the first post in this series here.)

Here are 4 big expenses that your teen is perfectly capable of paying for, despite your assumptions otherwise:

Striking a Balance with Kids and Money

The truth is somewhere in between.

That phrase comes to mind a lot while parenting. (If you’ve ever sorted out the claims of two bickering children, you know what I mean.)

It also comes to mind when teaching kids about money.

Spending. Saving.

Limits. Leniency.

It isn’t just one or the other. It’s about balance, and that theme shines strongly in the Spending chapter from the new book Smart Money Smart Kids. (Why am I reading the new book by Dave Ramsey and his daughter Rachel Cruze? See the first post in this series here.) In fact, I was pleasantly surprised to see the theme of balance so prominently represented throughout the book. Why? Let’s be honest, Dave Ramsey has a reputation for being, well,... harsh. But Dave has a real soft spot when it comes to kids. As he puts it:

FamZoo Security Update

As you may be aware, major websites and internet security experts made news this week by announcing a security flaw in a commonly used piece of internet security software called OpenSSL. You can get more details here:

http://www.businessinsider.com/heartbleed-bug-explainer-2014-4

OpenSSL is used by banks, merchants, and other service providers, including FamZoo, to encrypt information as it passes back and forth between your browser and a website. This week it was announced that the "Heartbleed" flaw was inadvertently introduced into OpenSSL in May of 2012.

The providers that handle our hosting, payment, and card processing services have taken steps to address the flaw on all of their servers. We continue to track the industry response to the situation and will keep our FamZoo families posted on any additional steps that we take.

What should you do? OpenSSL is used in roughly two-thirds of the websites on the Internet. Security experts recommend that you change your passwords periodically even under normal conditions; now is probably a good time to start that good practice! Here's the FamZoo FAQ entry on changing FamZoo passwords:

http://blog.famzoo.com/p/famzoo-faqs.html#edit-member

Please let us know if you have any questions.

Connecting the Dots Between Money and Work for Your Kids

Where does money come from? That’s a silly question — just ask any little kid and you’ll get the obvious answer:

“It pops out of a machine that my mom visits.”

“It lives on a magical card in my dad’s wallet.”

“It comes from my mom’s iPhone.”

Uh oh...

Setting a Good Money Example for Your Kids: Sufficient? Necessary?

“Set a good example!”

That tip inevitably ranks high in the typical Top N list for teaching kids good money habits.

Sure, setting a good example is an excellent thing to do as a parent, but the advice makes me cringe in this case for two reasons: complacency on the one hand and paralysis on the other.

Teaching Kids Good Money Habits the Ramsey Way: Introduction

No two families are exactly alike when it comes to teaching kids about money. It’s one of those parenting topics that can stir some deep emotions, strong convictions, and raging debates. That’s why we’re so careful not to push any specific financial approach or agenda at FamZoo.com. If you have a desire to teach your kids “good” money habits (where you get to define what “good” means), then we’re here for you. We’ll make it more convenient, hands-on, and engaging to translate that desire into sustained action. We give you a big box of helpful tools, and you pick the ones that make the most sense for your family.

Unfortunately, choosing from a big, open toolbox can leave many families a bit stymied. Parents ask us: “Which tools are best for my family? How do I use them and when?” Each family is looking for a money teaching recipe that matches their tastes — something they can pick up and run with immediately. The problem is: how do we figure out what those tastes are? One way is to have a family identify their favorite “money chef” — a personal finance luminary who promotes a specific system or approach. Once we know the desired recipe, it’s easy to suggest the right tools to get the job done.

One undeniably popular personal finance icon is Dave Ramsey. Dave has a huge following and has produced several offerings that deal specifically with teaching kids good money habits. In fact, he and his daughter, Rachel Cruze, are weeks away from releasing a new book that pulls all of their youth financial education advice together in one place. It’s called “Smart Money Smart Kids.” I’ve been reading pre-release chapters of the upcoming book. It’s very thoughtful and well written. I’m confident that all parents — even those who don’t count themselves among the Dave Ramsey flock — can find something valuable in the book to apply within their families. At minimum, reading the book will force you to think through how you are teaching (or plan to teach) your own kids about money. That’s useful all in itself. Adapt and apply the ideas you like, ignore the ones you don’t.

Over the next several weeks, I’ll be posting my favorite points from each section of the book. When relevant, I’ll describe how FamZoo can be used to support those concepts.

So, let’s jump in with Dave’s introduction to the book. Here are my favorite nuggets with my take on each:

8 Unique Family Finance Tips for Saving Money

What is your number one little known, yet important tip for how families can start saving money today?

That was the question posed to family finance experts recently and featured in the article 32 Family Finance Experts Reveal Their Top Tips for How Families Can Save Big Money.

Of the 32 entries, here are the 8 that I felt were most unique and why (excluding a virtual family bank of course). Click through on each one to see the expert’s explanation:

5 Reasons to Lock Your Teen’s Prepaid Card

Prepaid cards are great for teens. There’s no credit check required to get one. There’s no risk of piling up debt or overdraft fees while using them. Most cards are widely accepted both in stores and online. The best offerings also have nice parental controls, like the ability to easily lock and unlock the card at any time. Once locked, the card can’t be used for purchases or participate in transfers until it is subsequently unlocked.

Why would you lock your teen’s card? Here are 5 common reasons:

Positively Parenting and Personal Finance for Kids

Roxanne Lochridge is a “Mama” to 3 youngins, a positive parenting evangelist, and a “family scientist.” In a recent interview, Roxanne grilled me on the following topics:

• [00:00] Who the heck are you?
• [01:24] How did you get involved in helping parents teach kids personal finance skills?
• [04:03] What is a virtual family bank?
• [05:50] When should kids start learning about personal finance?
• [07:55] Should parents pay their kids an allowance, and if so, should that be tied to chores?
• [10:47] Do you have any tips on teaching kids to budget?
• [15:55] How do you teach your kids about planning for and paying bills?
• [18:01] Are prepaid cards a good idea for kids?
• [19:45] What are your thoughts about giving your child a loan?
• [23:02] How do you encourage your kids to save when their saving and investment options have such tiny returns?
• [26:47] What are some good ways to introduce kids to philanthropy?

Want to know the answers? You can listen to the interview here or click on the links above to jump right to the answer in the transcript below.

Teach Your Pre-Teen Kid Essential Money Management Skills with a Prepaid Card

A prepaid card is a great tool for teaching essential money management skills to kids under 13. Why?

• It’s safer than cash in a piggy bank;
• It’s widely accepted in stores and online;
• It automatically tracks transactions; and
• It introduces your child to modern banking and personal finance concepts.

Why start all this before the age of 13? A recent Cambridge study concluded that many money habits are set by age 7. Yikes!

“Wait a minute,” you say. “Don’t kids have to be at least 13 to get a prepaid debit card?”
Yes, that certainly seems to be the norm.

So how do kids under 13 get a hold of a prepaid card?
They don’t. You do.

Here’s how you can teach your pre-teen good money habits with a prepaid card:

Is Your Card the Target of Fraud? Know Instantly

By now, everyone has heard of the huge breach of credit and debit card data at Target affecting up to 70 million people. Or, is it 110 million? Either way, all I can say is “YOW!”

Are you sitting around wondering whether some fraudster is out there right now making a purchase with your card? You’ll no doubt be scanning your regular statements or scanning your transactions online.

Not me.

Your Kid's Good Money Habits Could Pump $200 Into Your Family Economy

If you stumble upon your youngster or teen doing something financially savvy in the next week or so, then pull out your phone, and snap a quick picture.

Why?

That photo could pump $200 into your family economy!

Just submit it to the FamZoo Good Money Habits Photo Contest by Monday, January 27, 2014 at 11:59 AM PST. Our panel of judges will award one grand prize of $200 for the best photo as well as three runner-up prizes worth $50 each. The prize money will be delivered either as a credit to the winner’s FamZoo prepaid card or as a separate standalone gift card.

What kind of habits are we talking about? The same ones that FamZoo helps parents teach, like:

• earning diligently,
• saving patiently,
• spending wisely,
• giving thoughtfully, or
• any other money habit that your family values.

So, how do you enter? Here are the highlights (but read the official contest rules before sending us your entry):