How to Conduct a Year-End Financial Review With Your Child

Now is the perfect time to sit down with your child and conduct a year-end review of their finances. If delivered diplomatically, a gentle audit will nudge them toward better fiscal habits in the year ahead.

To set the right tone for a candid exchange, I like to break the ice by confessing one or two boneheaded financial mistakes of my own. Like when I wasted a gazillion dollars on an unnecessary storage locker — for 13 years! Hey, we all make financial mistakes, right?

As you browse through your kid’s transactions from the past year together, here are a few things to look for and discuss:

How To Manage A Teen Clothing Budget

Parents often ask me how to teach teens budgeting basics. My favorite approach takes a page from the envelope budgeting system playbook, but with a digital twist.

In the traditional envelope system, each category of spending has its own labeled envelope stuffed with the budgeted allocation of cash for the month. Purchases must be funded with the cash from the appropriate envelope. So, all clothing purchases come out of the envelope labeled “clothing”. Super simple.

For the digital twist, replace cash-stuffed envelopes with automatically loaded FamZoo cards. So, all clothing purchases come out of the card labeled “clothing”. Still super simple. And it works in today’s online world where cash is no longer welcome.

When introducing teens to budgeting, I recommend keeping things narrowly focused. No need to overwhelm. Start by choosing just one envelope outside of everyday spending. Clothing is typically an excellent choice for teens.

Here’s how to get your system up and running:

7 Ways To Move Money To Kids

What’s the best way to move money to your kids?

Trick question. It depends. It depends on their ages and circumstances. It depends on your money values and the messages you want to deliver.

Here are seven options to consider:

Hey Siri, Hey Google: "FamZoo Balance."

Wouldn’t it be cool and convenient to retrieve your card balance from your phone by just talking to it? A short, sweet voice command like:

“Hey Siri, FamZoo balance.”

on your iPhone.

Or:

“Hey Google, FamZoo balance.”

on your Android phone.

Alternatively, if you need to keep things quiet, what if you could retrieve your balance with a single tap on a special home screen icon?

And what if you could quickly kick off other cool automated commands too, like:

How To Raise Super-Saver Kids in 5 Simple Steps

George Samuel Clason’s 1926 classic, The Richest Man in Babylon, popularized the adage “pay yourself first” as a pillar of wealth building.

Easy to say. Hard to do. Particularly for kids.

How do we translate Clason’s undeniably sound principle into a lasting habit for our children?

Follow these five steps:

Category Codes Carry Clues to Kids' Transactions

Where did that transaction come from?

Between kids just learning the financial ropes, teens pushing boundaries, merchants deploying dark patterns, and fraudsters pouncing on vulnerabilities, parents routinely have to don their detective hats to track down the source of “mystery” charges. Occasionally it’s fraud. Most times it isn’t (see Five Flavors of Faux Fraud).

This month, we added a new tool to the FamZoo transaction tracking toolbox: merchant category codes, or MCCs for short. MCCs are defined by the International Organization for Standardization (ISO) and used to classify merchants by the type of goods or services provided. When the transaction description fails to unlock the mystery of a purchase’s origin, the MCC description just might do the trick.

Mining Declines for Valuable Money Lessons

Most card providers sugar coat their transaction histories. If you open up their apps, you’ll only see the successful or pending transactions listed — no failed ones.

Not so with FamZoo. We show everything: successful transactions, unsuccessful attempts, and even fraudulent hits. It’s the good, the bad, and the ugly. Why show the latter two? We believe a valuable lesson lurks in every failed transaction.

You can spot a failed transaction in the history by looking for a red DECLINED lozenge just beneath the transaction’s date in the left hand column.

Click or tap on the lozenge to reveal the details behind the failure.

Here’s a sampling of five common failures and some important lessons to be gleaned:

Three Signs Kids Grok Compound Interest

If you “grok” something, you really “get it.” It’s a term coined by the Sci Fi author, Robert Heinlein. It subsequently flourished in computer nerd circles — of which I have been a member since the early 80s. 🤓

How do you know if your kid groks the incredible power of compound interest?

Wait, let’s pause for a second...

Five Flavors of Faux Fraud

Things aren’t always as they initially appear — like unauthorized transactions.

Upon closer inspection, sometimes they aren’t unauthorized after all.

Since we’re laser focused on (a) teaching kids the financial ropes, and (b) thwarting fraudsters on our platform, we investigate all unauthorized transaction reports very carefully. With your help, extra due diligence can yield a valuable lesson for a child or an important clue to cracking a new fraudster scheme. Or, sometimes, both.

With over a decade of researching fraudulent transactions under our belt, we’ve compiled a list of classic faux fraud flavors — transactions that look like fraud, but aren’t. Here are five of the most common patterns we see and some tips for identifying them:

Hey Kids, It's Payback Time

Parents aren’t the only ones who need to fork over funds. Sometimes, kids need to make payments to parents and siblings. Here are some classic cases where kids need to pay up:

• Pay off a family bet. Colby bet Dad $2 that the Tigers wouldn’t win. They did. Pay back time.
• Pay a family member for covering a chore. Ellie fed the dog yesterday, which is Colby’s job. Pay back time.
• Reimburse a family member for a purchase. Ellie picked up In-N-Out for Colby. Pay back time.
• Pay back a family debt. Ellie borrowed a dollar from Colby at the county fair. Pay back time.

But, wait. Kids can’t initiate transfers to other family members in FamZoo. They can only request transfers between their own accounts or request funds from the primary funding card (via money requests and reimbursements), right?

3 Roads To A Rock Solid Balance: Bribe, Badger, Barter.

Keeping a bank account balance well north of zero is a healthy financial habit.

Why? Margin for money errors.

With a generous balance in place, you can:

• Prevent predatory overdraft fees or embarrassing declines. Sometimes an expense is more than expected. No worries. The extra balance will cover it.
• Avoid money anxiety. Life is full of little financial emergencies. An extra balance acts like a mini emergency fund. One less thing to worry about.
• Automate billing with confidence. Putting bills on auto-pilot saves time and avoids late fees. But, what if a bill hits sooner or harder than expected? No need to sweat the precise timing or amount when you have plenty of cushion in your balance.

The bottom line: a bigger balance is better.

Unfortunately, our data shows this habit does not come easily to kids. The last time I dug up our decline data, “insufficient balance” was far and away the most common decline reason at 62%. (That’s almost three times more common than the second most popular reason, “invalid billing address.”)

So how can you nudge your kids into maintaining healthier balances?

A New Look for FamZoo in 2023

FamZoo rolled out a fresh new user interface at 4AM on Tuesday, January 3, 2023.

The new design delivers:

• A more intuitive, streamlined navigation scheme.
• A more attractive, clean, and modern look.
• A more suitable experience for family members of all ages.
• A more consistent, refined color palette.
• A customizable color architecture that facilitates co-branding by our growing number of banking partners.