What's the Difference Between Prepaid Card Accounts and IOU Accounts?

“Why can’t we get the money out of my daughter’s savings account? It seems to have disappeared!”

We get that panicked question from time to time.

When money mysteriously “goes missing” in FamZoo, an IOU account is almost always the culprit.

In a typical scenario, the parent inadvertently sets up an IOU account for savings and allocates a portion of allowance or chore payments to it. Later down the road, the parent is dismayed to find that no real money has accumulated in the account. Instead, an unanticipated debt has accumulated that must be paid off to the child.

To understand how this happens, let’s back up a bit. Think of the classic money jar system that parents often use with kids for separating spending, saving, and giving.