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:

1. Ad hoc credits — move money as needed. Whenever your kid needs money and you feel it’s appropriate, just open up FamZoo, hit the plus icon next to your kid’s card on the Accounts screen, enter the amount, enter a description like “Lunch money”, and select Credit Account. The money moves immediately to your child’s card. Easy-peasy.
2. Allowance — move money on a regular schedule. Create an allowance to move a fixed or age-proportional amount to your child each day, week, month, or year. Think of an allowance as a very simple budget. The most common case is a modest weekly “pocket money” allowance delivered to a spending card to cover everyday incidentals. As kids get older, I like to add a monthly or annual allowance delivered to a separate card dedicated to a specific expense, like clothing. It’s a simple setup to hone the skill of managing a lump sum of funds over a longer timeframe.
3. Checklist — move money as items are completed on a list. Create checklists to reward the completion of chores or odd jobs around the house. Many families combine a modest allowance with a checklist to provide occasional opportunities to earn extra money through extra work. Some families foster a little competition for those opportunities with a “first-dibs” setup. The early bird gets the worm.
4. Money request — move money in response to a request. Instead of doling out money, make your kid beg ask for it! Your child can launch a money request by selecting the arrow icon next to their card in the Accounts screen. They’ll be prompted to fill out a short form with the amount and a compelling justification. When they do, you'll receive a text message. Select the embedded link to approve, partially approve, or deny the request. Some families like to use money requests as an entrepreneurial alternative to chore charts. “Hey kids, if you see work around the house to be done, do it. Then, negotiate payment with a money request.”
5. Reimbursement request — move money in response to a request for the reimbursement of a specific purchase. A reimbursement request is just like a money request, but after the fact. Your child must purchase the item first, and then request payment from you to recoup the cost. To do so, your kid selects the little return arrow next to the transaction to launch the request. You receive a message with an embedded link to review the request and approve, partially approve, or deny the amount. I like to use the reimbursement technique liberally, even if I’m happy to foot the bill for most of my kid’s expenses. Why? Making the purchases themselves forces kids to (a) understand how much everyday items cost, and (b) maintain a healthy balance well north of zero (so they can purchase the items in the first place). Two good habits in one.
6. Parent-paid compound interest — move an amount of money on a regular schedule that is calculated as a percentage of the current card balance. Reward kids for not spending. More balance, more money. Set up aggressive, frequent parent-paid compound interest so they can experience the magic of compounding with amounts and timeframes that a kid can actually appreciate. Once kids realize that their money can make money if they keep their paws off it, they’re well on their way to a lifelong habit of saving and investing.
7. Direct deposit — move money from an employer. Time for the Bank of Mom/Dad to step aside. Your kid’s FamZoo card has its own routing and account number, so paychecks from a part time or summer job can be deposited directly into their card account.

All but number 7 require you to have sufficient funds on your primary funding card. If you don’t, FamZoo will record any shortfall as a card IOU. As soon as you top off your primary funding card with enough funds, FamZoo will automatically repay any outstanding card IOUs.

Of course, the beauty of number 7 is that you don’t need any money at all on your primary funding card for Junior to get paid. You’re no longer footing the bill.

And, that’s ultimately the shift we want to see — from dependence to self-sufficiency.