Helping your children understand the value of money, develop a good work ethic and learn how to manage their finances, is one of the most valuable gifts you can give them. The big question is how parents can do that in today’s busy and complex world. If that sounds familiar, you should give FamZoo a try.
Related article: 7 Hands-on Ways to Teach Kids the Value of Money
What is FamZoo?
FamZoo is one of a new breed of virtual family banks that helps busy parents manage their family finances. It also helps train their children to live within their means, save for the future, give generously, and learn how to achieve their financial goals. There are several similar products around, such as Agent Piggy, Bankaroo and Active Allowance, but what makes FamZoo stand out is how packed it is with useful tools and how much fun it is for kids and parents alike.
How Does FamZoo Work?
A time tested method for teaching children how to manage their money is to provide them with a cash allowance. Give them an allowance or other rewards for doing chores and you teach them the value of hard work. Teach them to list their expenses, income and goals and design a budget. Get them to do this, and they will always be able to take care of their finances. All that sounds like common sense until you actually try to put it into work.
Just remembering to have enough cash on you to give out your kids’ allowance can be a challenge, especially if you have children of different ages. A big issue is where kids are supposed to keep the money they save for a rainy day or their long term goals. Piggy banks don’t really work because you can’t easily know how much you have and they are either too hard to access (you have to break them) or too easy, and the temptation of raiding it is too much. Writing a budget and checking that they are keeping to it, can be next to impossible this way.
FamZoo fixes all these issues by allowing you to create virtual bank accounts for every family member, with you as the bank manager. Most closely associated with a piggy bank is the FamZoos IOU account. As “pocket money,” children need to come to you to make a withdrawal before making any purchases.
FamZoo’s accounts also make it easy to share expenses among family members, inflict penalties on those who don’t do their chores, payout interest and rewards as an incentive to saving, track spending and budgets, and even payout and receive payments on loans.
FamZoo’s Prepaid Credit Cards
Although using the IOU system may be enough for your family, allowing your kids to have a prepaid credit card instead of cash is a priceless training tool. For younger kids, they learn how “plastic money” really works, and for teens, they’ll get much-needed practice before tackling real student credit cards in college.
It’s safe because the main cardholder, that’s you, decides how much cash to load on each card. It’s cheap because there are no fees linked to them, apart from the FamZoo subscription charge. The only additional cost is a one-time fee of $2 per card if you need more than four cards for your family.
How Much Does FamZoo Cost?
Whether you choose the IOU system or the prepaid card system, FamZoo’s subscription is $6 a month, if you pay monthly, or $2.50 a month if you pay for two years ($60). There is a free two-month trial period, which gives you plenty of time to make sure your family will use the service.
What’s Not To Love About FamZoo?
FamZoo is the love child of CEO Bill Dwight and VP of Operations Chris Beaufort, who were classmates at Princeton. The cartoonist, Henry Payne, who was Bill’s roommate at Princeton, is excellent. His work really gives the website a fun and friendly touch that makes it a winner with kids.
The company is also a family-oriented business, and this shows in their customer service. For example, if after using the free trial you fall in love with it but can’t afford to pay the $6 a month, contact them and explain your situation. They will try to work something out for you.
The biggest advantage of FamZoo over other alternatives is that it provides all the financial services you need in one place. There are free or one-time fee apps out there but none that allows you to give out loans, manage chores, payout allowances, share expenses, and create budgets all in one place.
The only cons are that it costs $6 a month, which is on the high end when compared with other virtual banks, and that it is mostly geared toward wealthier families.
Lower-income families may decide they don’t need all the extra features and settle for a free allowance and chore management app. However, if you can afford the subscription, this beautifully designed and illustrated app is a winner for parents who want to take the drama out of training their kids to stick to a budget.
Use FamZoo with your family? Let them know what you think on our FamZoo reviews page.
Andrew is the managing editor for SuperMoney and a certified personal finance counselor. He loves to geek out on financial data and translate it into actionable insights everyone can understand. His work is often cited by major publications and institutions, such as Forbes, U.S. News, Fox Business, SFGate, Realtor, Deloitte, and Business Insider.