How we do allowance with FamZoo
Back in 2014, I wrote a guest post for Mint about children's allowances.
After that I got an email from the guy who founded FamZoo.com, a service that makes allowances easier.
I was intrigued, so I signed up, and we've been paying customers ever since.
With four kids, I always used to struggle to keep up with paying allowance, especially since it seemed like I never had the cash around to pay my kids.
Plus, keeping the change on hand to divide up their money into spending, saving, and giving was difficult.
But.
FamZoo.com allowed me to automate this process, which was an enormous life saver for me.
How does FamZoo work?
FamZoo operates on pre-paid debit cards. I, as the parent, have a debit card, which I load from my bank account.
And then from that card, I have it automatically set up to load my kids' cards each month.
Each kid has a spending, saving, and giving card, and I have their allowance set up to send certain percentages to each card (10% to giving, for instance.)
You can set up the allowance to do auto-transfers, so you never, ever have to remember to pay allowance again.
(Glory be.)
And even if you forget to reload your parent card, no worries...FamZoo keeps track of how much you owe each kid, and it'll automatically pay them once you load your parent card up again.
Can I do more than allowances with FamZoo?
Yep! You can do manual transfers whenever you want. So, for instance, if Sonia gets paid with a check, I can deposit that into my checking account and then send the money into Sonia's FamZoo accounts from my parent card.
Or if I pay for one of my kids' purchases while we're out (if they've forgotten their FamZoo card!), I can just transfer their money to my account.
How do kids access the money on the FamZoo cards?
Spending: My kids just take their FamZoo cards to the store and use them in the credit card machine. The card is a debit card, so you can only spend what's on the card. This teaches kids to think before they buy, and to keep tabs on how much spending money they have.
Saving: Obviously kids won't be using this card a whole lot, but if they're saving for a particular large purchase, they can just use the card to make that purchase once they've reached their goal.
Giving: The debit card is easy to use for a variety of charitable options. Most churches allow you to give via card now, and so do most charities.
How much does FamZoo cost?
Either $5.99/month OR if you pay in advance, it can be as low as $2.50/month. And the price is per family, not per kid, so it's an even better deal if you have multiple kids.
For instance, if you have four kids on the plan, it will cost you $0.625/kid per month. Super affordable!
These memberships give you one parent card and three child cards, and if you want more cards, there's just a one-time fee of $2 apiece.
I wanted spending, saving, and giving cards for each of my kids, so I ordered 9 extra cards when I set up our accounts. That was $18, but it was a one-time fee and it was totally worth it to me.
Note: If your kids are under 13, your name will be on the card until they're 13, and you'll sign for transactions they make with it. It will be labeled with their account name, though.
Why would I want to pay for this service?
There are two big reasons, in my opinion.
1. I don't have to make allowance payments.
Not having to deal with doling out allowance for my kids is completely worth the cost of this service. I was very hit or miss with paying my kids allowance before FamZoo, and now the payments just happen automatically.
It's one less thing I have to think about, and my kids are happier because they're getting paid regularly. 😉
This is worth the $2.50 a month alone.
2. FamZoo helps kids practice responsible card use.
FamZoo provides a lovely way to teach even grade schoolers about how to handle a debit card, and to get them into the habit of looking at a card as a way to spend the money that you HAVE, not the money you hope to have in a month.
Here are a bunch of other features/benefits if you still need convincing!
How do I sign up?
Click here to get started with a free trial at FamZoo.com
If you decide FamZoo isn't for you, you can just cancel your membership.
If you decide you love the ease of automatic allowance payments (YES!), then your automatic payment plan will kick in and you'll be good to go.
Famzoo is a small, family-owned company, and they make it easy to cancel. So, if you're on the fence, go ahead and try it. It really is risk-free.
Hopefully I gave you enough info to get you started, but if you have any questions, please let me know in the comments!
P.S. If you have super young kids (preschoolers), I do still think that a cash-based allowance system is a good way to start out because kids that small need a visual connection to the money. But once your kids get a little older, I think FamZoo is super useful service to transition to.
This post contains affiliate links. I pay for my own FamZoo membership just like any other customer. This post is not sponsored and all opinions are my own. If you sign up with FamZoo through a link in this post, I earn a small commission at no extra cost to you.
We had the same (no cash for allowance! provlem). I almost signed up for FamZoo as well, until I realized that my bank would let me setup a free kids spending account with a debit card (overdraft is off- so it’s basically the same thing as a prepaid card since the money has to be there to spend it). The kids account is linked to my account so I can setup automatic transfers for allowance, one-time transfers and deposit her birthday checks straight into her account (mobile deposit). It has a free checking account linked with it for saving, and unlike famzoo I don’t have to sign for her purchases it’s all in her name (mine are under 13) which is nice because my kids like to go shopping with their grandparents so I’m not always there to sign. Best of all its 100% free. Anyway- I’m just mentioning it because for us it does everything we needed FamZoo to do but was 100% free, so I just thought maybe others wanted to see if that is an option!
I would be interested in this. Do you mind sharing what bank you use or do you know if most banks do this?
We bank with USAA but I know a number of banks do this- I have friends who have done the same thing for their kids at other banks. I don’t know if all banks do this, but at least a number of them do!
Thanks!
Interesting. I checked it out, and while you can turn overdraft protection off, it still means they CAN overdraft and then get hit w/ a steep fee. This was the same at USAA and the other bank we use as well that offers youth checking.
Another plus for going the bank route is you may be able to get your child an account that earns some interest! Always good to teach him/her how to earn some money with his/her accounts rather than just spend what is there! Free account + interest is way better than paying for a debit card that earns nothing!
For me, I am looking for the opposite. I want a card that is NOT linked to our real accounts, in case it gets hacked / lost or stolen. Becareful!
I totally agree with the convenience of this program (nothing like the IOU post-it notes) but, if you are transferring the money to each of their three accounts, how is that teaching them to make the decision on savings and giving? It seems to me like forced savings, not a bad thing as I have a percentage of my pay check go directly into our savings, but haven't you done the hard part for them? Savings/giving is such a hard thing to teach; I know your kids have an excellent role model to follow.
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So cool to teach kids that swiping a card is real money!
No kids here, but cool to learn how allowances have progressed since I got my $5 per week. 🙂
I love this idea! My husband and I have been talking about allowances, but our kids are only 2 and 3.5. At what age did your children begin receiving an allowance?
My husband grew up with a "spend half, save half" method, instilled by his grandmother. I didn't receive an allowance growing up; instead, my mom and I would just talk about what was needed or wanted and weigh the costs/benefits. I don't think one method is better than another, but I really like how your kids can make decisions about what to do with the funds available to them and I hope my family works out something similar! 🙂
If it works well for you, that's all that matters. It sounds a little too Mom's managing my money to me but my 3 kids all went away to college at age 18 and needed to be able to manage money and pay bills independently. We gave them a monthly certain amount and if they spent it early, they were out of luck. Bills all seemed to get paid and after graduation, they have never asked me for a loan. I know some parents gift a down payment but we gifted college.
I mean no disrespect, but how can this be considered Frugal? I would never waste almost $60. a year on something that to me seems so gimmicky. I would rather train myself to have the necessary cash on hand and pay myself the $60. as a well deserved bonus. Having raised and college educated four kids I have learned not to let someone manage my money...
Just my opinion.
I mean, if you read the post she says the prepay price is only $30 a year. So 'training yourself' to have cash and change and the extra chore of dealing with 12 different money amounts each month, plus then the kids each needing to carry their cash on hand all the time in case they see something they want, or having her pay for it and then needing to remember to settle up, plus not being able to pay cash through charity websites, etc - she clearly feels it IS worth it. Anyway, kids need to learn how to use plastic as cash, which is something many people have a disconnect with. So $30 a year to make a regular chore easier that makes everyone involved happier... Why wouldn't that be reasonable?
Like another reader said, the service is actually only $30/year, which works out to $2.50/month. Definitely worth it to me to have automated allowance!
I tried, and was just not very good at having the cash/change on hand to pay my kids allowance and have them divide it up into three categories. We all have to know ourselves and our own weaknesses, and this is one of mine! So, $2.50/month is a wise expenditure for me. But of course, if you are a person who is really good at keeping up on paying allowances, this is probably not a huge selling point to you.
I have had the same type of set up with my kids through my credit union. While mine is free (but only one card per kiddo), I would DEFINITELY pay for the service if required. Not only for all of the reasons you stated, but also because I have a way to get funds to them instantly if need be. The convenience of this for teens has been very valuable to my family. It's nice to be able to send her $ and have her pick up something at the store for me or send gas $ if she's going somewhere with friends (she doesn't drive herself) and I want to pitch in on her behalf of if she needs something for school and is out and about and can buy it herself without requiring me to go. She's also really great about managing her $ this way, understands she needs to have funds available to use her card, can order items online herself without my assistance, etc. I think $30 a year ($7.50 a year per child in this case) is not outrageous.
Yeah, I definitely do not have my budget so tightly in hand that a $7.50/kid per year charge is a big priority for me. Of course, if things got that tight, I'd cut out FamZoo. But at this point, there's a lot of other low-hanging fruit I could cut before FamZoo.
I thought the same thing, but I guess it works for some people. To me, $60 is a nice dinner out, or 12 cheap movies, or...
Right. We all make choices in how we spend our money...saving on this thing so we can spend on that thing. I hardly ever go to a movie theater, but boy, I sure did need some help in getting allowance taken care of at my house. 🙂
Right, but prepay is $30. You can make your own choices, but it should be based in correct information.
I found that my college children still spent way to much using any kind of card. Mine use the envelope system for all expenditures other than automatic payments and manage their money much more efficiently by actually seeing what they have. My children do have checking accounts with no fees. They optimize their spending by making automatic payments and avoiding additional fees for late payment. We don't pay any fees to save money in any way. Frivilous charges add up.
That sounds like an interesting app! Mr. FAF and I haven't thought about whether we should give our son an allowance or how much we should give him. But I will look into this app once we're ready!
Kristen,
I love learning we have something else in common; even with our lifestyles being so different! I feel good knowing I have a shared trait with a person I respect! I think there are real benefits to fully allocating the money out of my bank account and into a child's account and FamZoo seems to handle that well. I have some reservations about my kids having multiple debit cards and having them on hand when they have an opportunity to shop. For others like me, I have to say the free app Kids Bank has been fabulous. It allows me to set how much each child receives, what percentage is charity, savings and spending. It also has an option to earn interest, show "deposit" and "withdraw" for spending and extra money received. It is not tied to an actual bank account but does give me an always up to date total of how much money each child has in each category. My kids can only spend what is in their balance and they can choose to put all of their spending into savings for a period if they are trying to reach a goal. About once a year we talk about what they might do with their charity funds.
Just wanted to share another option for those that may want a free app or may have concerns about kids and debit cards for whatever reason.
I got my kids a kid account with Capital One and can do the same thing for free. They have debit cards, can check their balance with their accounts. I can transfer money from a free checking account I set-up on line. And transfers happen instantly. As this isn't my primary checking account I have auto transfers set to happen automatically to my kids (as they take a couple days to transfer from my primary bank). And always have some in my online checking account for those last minute transfers or can you stop on the way home and get X for me (they are now driving teens). But all free. I would never pay $5.99 a month or even $2.50 a month for something you can easily do for free. Having said that - this process has been fabulous as I went from preteens to teens and helping them learn about money!
This is interesting to me -- I would like to have a conversation with my grown kids about how or if they do allowances for their kids; they might want to check into FamZoo.
My husband and I were both raised without receiving an allowance, and he and I as a couple were chronically short of funds when our kids were growing up, so they were raised without receiving allowances, too. My kids each got part time jobs while in high school and college (we paid for their college fees that their scholarships didn't pay for). I honestly don't know which is better -- to give an allowance or not, but I will say that I did not have any real concept of handling money as I grew up, so maybe an allowance would have been better for me. On the other hand, my husband would have probably blown any allowance money because he would have considered it easy money, but the money he made mowing, baling hay, and cleaning stalls, he took good care of. Regardless, I think teaching kids about money is crucial, and FamZoo might be a good way to do it.
Nice concept! We basically use our bank's option to do something similar without a fee with our teens. May need to expand to the younger kids as well after reading this post.
We considered this, however, I have followed Gail Vaz Oxlade for years, and her advice is to have them actually handle cash at a young age. It is more more difficult for them to give up their money that is in their hand for a purchase and makes them think before buying. They also realize what money actually is, since we rarely use cash, we were worried that they would think you have endless money as long as you have a credit card. While our kids were younger we have done this process even though it has been a bit tedious at times. Now that they are getting older, we are doing debit cards.
Interesting point about Gail. Have you watched the ONE episode where she recommends the couple use cards instead of cash?
I LOVE that episode because the couple were younger and cash money didn't have the same impact on them as did seeing the bank balance go down electronically. For me (and them), cash money feels like Monopoly money- I'm free to spend it like crazy because it's already out of my account and somehow "doesn't count".
We are DINKs, so can't comment on allowances, but I wanted to say how happy I am to see Gail mentioned here. I've been following her blog, watching her shows and reading her books forever. I just love her no-nonesense tell it like it is approach! Whenever I am faced with a financial situation that requires some decision-making, I think WWGD? (what would Gail do)!
I read this early this morning before any comments and mentally thought "Whaaat?" It truly is a whole new world, isn't it?
Sounds beneficial for the parents to foist a parental task over to an outside entity, but I still think younger kids -- until high school at least -- should understand actual money. Besides, it must be hard to buy gumballs with a debit card. As far as that goes, can teens use these in drive throughs or will they have to on inside?
The savings aspect sounds good but would the giving part really feel like giving to a cause with your own freewill, or be on a par with income tax taken out of your check? The mom and dad tax.
I've read that college freshmen can get in financial difficulty with easily obtaining credit cards so maybe there would be that connect. Personally, I use more with a debit card than when I'm using cash, but not nearly as much as when the cc comes out.
Yep, you can use these in drive-throughs, just like adults use their credit cards (I haven't used cash in a drive through in a long time!).
With the giving card, part of the allowance can go on there, and then the kid can use the card to give to whatever charity they'd like to donate to. So, hopefully it doesn't feel impersonal.
I didn't know you can use cc at a drive through, not that I do that often. Now I've learned two things today.
Yep, at least where I live, you can! I remember when I first got married, we always had to use cash at a fast food place (not that we went much in those barebones days), but they all accept cards here now.
I never got an allowance (there just wasn't any money to go around) so I'm really at a loss for how to do allowance when my kid is old enough to have money.
My son is almost 13 and has never gotten an "allowance". He is responsible for household chores (cleaning bathrooms 1x / wk, unloading the dishwasher, doing his laundry, tidying his room and picking up dog poo in the yard 1x / wk). He is not paid for these chores, however, when he wants something (new video game, toy, etc) we evaluate his behavior, grades and willingness to do his chores and then decide whether or not to give him the money to get what it is he wants.
That method might not work for everyone, but it has definitely worked for us!
I just listened to a Focus on the Family podcast with Dave Ramsey that was all about kids and money! He gave some great advice and guidelines. I'd highly encourage anyone to go give it a listen. It's titled Equipping your kids to handle money and is 2 parts.
I think this sounds like a great resource for kids, especially as they get older! Thanks for sharing Kristen!
For Dave Ramsey fans, I highly recommend the book co-written with his daughter: Smart Money, Smart Kids - some excellent ideas in there.
Another great book: The Opposite of Spoiled by Ron Lieber - tons of practical advice for teaching kids to be responsible and thoughtful with money.
And, lastly, The First National Bank of Dad, by David Owen. FamZoo implements a lot of the ideas in that book - like parent-paid interest to encourage kids to save and learn the power of compound interest in a time-frame and amounts that kids can appreciate. Something traditional bank savings accounts just don't do - see: http://blog.famzoo.com/2015/07/why-savings-accounts-do-not-teach-kids-to-save.html
I would not do this - it seems pricy - but it's good to know that it exists.
I totally do NOT mean this in a snarky way, but I'm just kind of scratching my head at this because $2.50/month ($0.625 per kid per month) feels like a drop in the bucket to me.
(Though Joshua has now moved on from FamZoo to an adult checking account so I'm up to $0.833 per kid per month ;)).
I understand if you're saying that this wouldn't be a useful service for you, but I'm struggling to think of pretty much anything I'd consider to be pricey at $2.50/month.
Not to be "snarky" either, but for me, it seems like these little things add up! A little here, a little there, paying for this, pre-packed dinners, mail-order clothes stylists just don't work for me right now, not because I don't have the money, but because it feels wasteful and unnecessary. But for other people, since they do work well and feel "frugal" that's great. It's an interesting concept that the inventor came up with!
Yes, these "little" items can really add up over time! Note the age your oldest child will/did start getting an allowance and estimate the age your youngest child will no longer get an allowance. For some families the time period between starting with the oldest child and ending with the youngest is over 20 years. $30 for 20 years is $600 and that is assuming no price increase in the service, which isn't likely to happen. A lot of people will think that is a lot of money for just distributing allowances, something that can be easily done for free.
I know not everyone does allowance, but I LOVE the idea of letting kids practice responsible card use before they go off on their own. I went a big hog wild and could have benefited from a bit of discipline before leaving the nest.
I could’ve really used this when my kids were younger! Neat idea!
One thing not mentioned is the parent-paid interest feature where you define a savings rate on the child's card. The interest pmts automatically come from your parent card. I give my kids an outlandish weekly rate (when compared to a traditional bank savings account) because I want to reward them for NOT spending and for carrying healthy balances.
Years later, my kids routinely ask to transfer funds off their spending cards onto their savings cards to put their money to work and reap the rewards of my awesome Bank Of Dad Compound Interest. That's one expense I never mind paying. 🙂
We have several behavioral finance features intended to nudge kids into good money habits through incentives, feedback, and repetition. That's the key difference with using FamZoo: our mission is to educate kids/teens. You'll see the other FinLit features if you click on Kristen's "other features" link.
You can definitely implement those kinds of things with a DIY approach using bank products . For example, you could calculate interest each week yourself, credit it to their subaccounts, and send encouraging text messages when the deposits hit. If you're doing that, kudos for sure! As a dad of 5, I just know how crazy things are for parents (FamZoo is short for "my Family is a Zoo"), so we try to lower the bar for money mentoring success by automating it. We keep the price as low as we can to maintain a solvent business. (Much cheaper than, say, piano lessons or science camp!)
What is the purpose of giving kids an allowance?
Largely, it's to give them some money to help them practice managing it. For instance, most 6 year olds aren't capable of earning money, so parents will give them an allowance to help them learn how to practice saving, spending, and giving.
If we sign up through one of your links that you get a referral fee from do we get the extra free month once we order the subscription. I'm trying to find a referral link that will give me the extra month. Thanks.
Oh man, I'm sorry, but I'm not entirely sure what the affiliate offer currently is!
Long Comment sorry!
I just signed up for famzoo before reading this article. I enjoyed reading it and thank you very much for it. For me the deciding factors were:
1. Protecting my bank account and the overdrafts. Even if you don't overdraft technically we still get hit with fees and I don't need that.
2. I looked into bank cards as some have mentioned. Until they turn 13 their name can't be on the card period. But with famzoo I can have my name and theirs! This is important in keeping them separate and establishing ownership in their minds.
3. As stated I never have cash in hand and always "owe" my kids. I have a note on my phone keeping track of IOUs and manually deduct from their imaginary accounts. this males it real!
4. Peace of mind! If they lose the card their money is just gone with prompt attention.
5. I considered just doing visa gift cards and reloading them once again to protect my bank account. but they are 4.95 a piece to register/activate everytime one is lost too! and the money is gone within minutes.
6. summary so I feel this is thrifty.... one payment, protecting bank account, teaching kids to manage bank account, peace of mind when lost, no more manual phone managed iou system and me forgetting to add or take away!! FREEDOM!!
I use Chase and they have a similar account with a debit card. I can transfer money to and from it. It has 3 areas connected to the card saving(can't be touched), atm & purchases. She can only use up to the amount in the acount. Purchases anywhere, atm at just the atm.