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How to Give Your Child an Allowance Advance, Responsibly.

Kid with empty pockets

Will you let your child practice paying the piper?

A mom recently wrote in:

“I frequently loan my kids some money against their weekly allowance or chore money for the following week. Can I use [FamZoo] to keep track of what they owe me?”

You might be thinking: “Wait, what? Payday loans for kids? Never!”

Not me. I think loans can be a valuable educational experience for kids to get under their belt.

Of course, it’s your call. Do what feels right for your family.

But, if you do grant Junior an advance, make sure you track it. Nothing good is learned when parental loans go unpaid. Fortunately, FamZoo's IOU accounts are perfect for tracking them and enforcing accountability.

The Setup

Here’s how to set up an IOU account to track any outstanding advances to Junior’s spending card:

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Three Things Cardholders Need to Know Before Calling In

No Clue Teen SSN Card

There are a few essential things you and your family members need to know before calling in to address issues with your FamZoo cards. Not knowing them could lead to unnecessary frustration and even unexpected card account blocks. Knowing them ensures a smoother customer service experience.

Family members need to know:

  1. Who the cardholder is. It may not be who you think it is.
  2. How to prove their identity. Many teens don’t know this.
  3. Who they’re calling. It may not be who you think it is.
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FamZoo Money Management 101: Start Here With Kids and Teens

Map to financially responsible cardholder
“Be prepared.” ~ Scout Motto

Before your child ventures out into the financial woods with their new FamZoo card, be sure to cover these money management basics together.

This guide assumes you have activated your cards and set up your reload option(s) of choice.

Debit Card 101

Let’s start with the card itself: a reloadable prepaid debit card with a secure EMV chip.

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How to Track Your Teen's Family 401(k)

The “Family 401(k)” is my all-time favorite family finance hack for parents seeking to help teens grow their wealth and investing IQ over decades. I’ve written and talked about the technique many times since 2011, and I’ve put it into practice with all 5 of my kids.

The Family 401(k) is a homespun version of the workplace 401(k) program commonly offered to employees. With a workplace 401(k), an employer kicks in extra money to help the employee build wealth in a tax-advantaged company sponsored retirement account. With a Family 401(k), parents kick in extra money to help their child grow wealth in a tax-advantaged individual retirement account known as a Roth IRA.

For the uninitiated, the quick recipe for the Family 401(k) is:

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6 Reasons To Review 529 Statements With Your Teen

College graduate on abstract financial background.

How much does your teen know about the 529 account you opened for college savings?

Nothing?

That’s the norm. Pretty dry stuff for a teenager.

Here’s a radical suggestion.

👉 Review your 529 statements with your teen.

And do it every quarter.

Yes, your initial sessions will be greeted with eyeball rolls, yawns, or worse. But keep up the good fight.

Through your consistent and repetitive efforts, your teen will gradually learn the following:

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