SHHHH. . .
Do you talk about it?
With your children?
Do you share your money weaknesses? Mistakes? Values?
Do you just hope that your children learn about it through osmosis?
Our previous approach to teaching money management was the envelope one. No, not the Dave Ramsey budgeting envelopes where envelopes are listed by category and are funded with cash.
We subscribed to the envelopes in the cupboard method of money managment for our children: Each child had an envelope that contained birthday money or the occasional oh-we-should-give-some-type-of-allowance money. I kept those in the kitchen in the china cupboard, right between the wine glasses and the salt and pepper shakers.
Every once in a while I’d catch a kid scaling the counter to get to his or her envelope or an envelope would mysteriously go missing. Or, my favorite: One child (usually Marc) would convince a younger child (usually Luke) that if they combined their money their purchasing power would enable them to buy. . .and, yes, it was usually something that Marc wanted. He is a very good salesman.
Likewise, when it came to allowances, we had no system. We’d ask the kids to do something for “the good of the family.” Or, my favorite line of reasoning said with a particularly righteous voice, “We all have to contribute to the family. So, please unload the dishwasher.” Let me tell you how quickly my kids jumped to complete whatever chore I had arbitrarily assigned. Yeah. . .
I also knew that we needed to teach our children about allocating their funds. I had read about the three jar system of teaching children to manage money. Each jar would be labeled either Savings, Spending, Tithing, and any money that a child would get or earn would be divided between those three jars. Great idea but with five kids, the thought of managing (or just storing) 15 jars was nothing short of a storage nightmare.
I needed a new system that both taught kids about money and that helped me easily manage their allowances and annual birthday treats.
We found Famzoo ! This one program has made the biggest difference in our lives this year and is teaching our children about earning, saving and spending their money.
Famzoo is a virtual bank. Parents set up accounts for their children on-line through Famzoo. Then, get this, you can set up automatic “deposits” of allowances into these virtual accounts, determine what percentage of the deposits should go into “long term saving” or “spending” or “tithing” accounts. Three “JARS” and I still have counter space.
Children can have their own login passwords so they can check their “accounts” but they can’t change any information. When birthday cash or tooth fairy visits or the occasional odd job for a neighbor results in a cash influx, the child gives me the money and I enter a credit into their account.
And, when a child wants to purchase something, ahhh. . .I can debit his or her account immediately through the mobil app I have on my phone. As the children get older, I can give them a prepaid debit card through Famzoo so that they can make these purchases on their own. For now, we have a discussion and then consult their account to see how much each purchase will deduct from their account. This has helped when we go to the store and they want everything. When I tell them they have to use their Famzoo money, the whining usually stops as they consider whether the purchase is worth that account deduction. Sometimes they decide that the item is what they want, but other times they decide to wait.
As a parent, it has been fascinating watching the money habits of my kids. Maddie and Luke are savers. They love watching their money add up in their Famzoo account. Maddie is willing to put off any small purchases until she saves enough for something big. She bought her own ipod a few months ago after over a year of saving. Marc, on the other hand, has a harder time putting off the little things in order to save for something big. He was very jealous that Maddie had a new ipod and at first blamed Scott and me for favoring her and getting the ipod for her. It was easy enough to show through Famzoo how he had spent his money little by little throughout the months that Maddie was saving.
Most importantly, this site has given the children a sense of control. Even when they want to purchase something that I think is a total waste of money, I’ll still voice my opinion, but they ultimately get to decide whether to go ahead with the purchase or not. “Yes, you can get that guinea pig (candy, video game, Barbie, Lego set). . .but it’ll have to come out of Famzoo. . .” Wow. Now, I’m not saying NO all of the time, I’m giving them the control to make a decision and live with or enjoy the consequences.
The idea of an allowance or not is very controversial but I want my children to develop their skills of managing money while they are young and the mistakes are a few dollars here and there rather than hundreds or even thousands of dollars when they are older. So, they need some type of small income. The chore chart has helped with making sure that the allowance isn’t money that hasn’t been earned.
We all make mistakes with money. Determining what we want (or don’t want), planning, saving and spending are good skills to learn early and to practice often. Famzoo offers a two month trial of their program and then the program costs as little as $2.50 a month if you subscribe for two years.