Wednesday, June 14, 2017

Teach Your Young Gamer To Budget

Gaming Loot Microtransaction

Kids pay money to play online games.

But you already knew that. You recognize the names in their transaction alerts: EA, Minecraft, Roblox, Steam, Blizzard, Riot Games, XBox, G2A.

Kids also pay money to buy tchotchkies for their gaming avatars — skins, potions, weapons.

You may already know that too. If not, check out sites like — a marketplace for trading in-game items.

But did you know kids are even paying money to watch other kids play online games?

Yep, that’s a thing. Check out Twitch. Find a live streamer. Look for the subscribe button (probably upper right), and check out the options. Kids pay to get badges, emoticons, ad-free viewing, and other “benefits”.

In fact, one 14 year old FamZoo cardholder paid a total of $134.97 in the last 30 days watching other gamers game. Yikes.

Why do I know this? A Monday article piqued my interest in what kids are spending on gaming these days. The Wall Street Journal reported that gaming providers like EA are charging less for the games themselves while reaping huge profits from the little microtransactions inside the games.

And just how much are gamers spending on in-game microtransactions? A mind-blowing $71 Billion worldwide in 2016. That rivals the entire GDP of Cuba!

The article prompted me to dig into the FamZoo data around gaming related transactions by our child cardholders. That’s what alerted me to the Twitch trend mentioned above.

Some other discoveries:

  • The average spending in the last 30 days by teen gamers using FamZoo cards is $27.41.
  • The most spent in that same period was $262.09 by a 16 year old.
  • Some kids pay money to play chess online. Yes, that was my favorite discovery.

Obviously, gaming companies smell a profit opportunity with our kids.

Me? I smell a financial literacy opportunity.

Try this with your young gamer:

  1. Review the gaming related transactions over the last month.
  2. Agree on a monthly gaming budget. Use the data from step 1 as a point of reference, but not necessarily a benchmark — note the average monthly teen spending mentioned above.
  3. Track spending versus the budget each month. As they say, “What gets measured gets managed.”

You might even consider a separate prepaid card dedicated to online gaming. Load it each month with the agreed-upon budget. Any attempts to overspend will be harmlessly declined.

So, whether your kid is paying for games, paying for do-dads inside games, paying other gamers to game, or all of the above, you need to get your head in the game as a parent. Know what your kid is doing. Then, use your kid’s gaming habit as an opportunity to pass along some critical personal finance basics.

Want to turn these tips into action? Check out

Wednesday, June 7, 2017

Stop Tolerating Fs On Your Kid’s Card Report

Dad and kid with prepaid card report

Kids aren’t making the grade when it comes to successfully transacting with prepaid cards.

Just take a look at these stats from FamZoo cardholders.

I sampled kids from active families who have:

  • used a card for at least 3 months, and
  • have made 20 or more purchase attempts in the last 90 days.

A decline percentage of 3% means that for every 100 purchase attempts, the cardholder would likely experience 3 declines. If those 3 declines were incurring average bank overdraft fees, the cardholder would be facing over $75 in penalties. Ouch.

Here’s how the kids break down by purchase decline percentages, which I bucketed into subjective grade levels:

Decline Percentage Percentage of kids Grade
0% 19.0% A+. Bravo!
5% or less (but over 0%) 12.1% B. Getting there.
25% or less (but over 5%) 32.8% C. Lots of work to do.
50% or less (but over 25%) 16.1% D. Pretty darn awful.
Over 50% 19.7% F. Yikes!

That’s a lot of kids bringing home bad money habit report cards.

I’ve written before about the 6 month Zero Decline Challenge as a test for bank account (or credit card) readiness. The good news is 19% of the kids from this sample are at least half way there. But the majority are nowhere close, with 19.7% flat out flunking.

I’ve also suggested assessing a parental overdraft fee as a way to curb declined transactions. It looks like the Bank of Mom/Dad would be clawing back a ton of fees from these kids!

But maybe you’d rather offer the carrot instead of applying the stick. A reward to encourage the good behavior instead of a penalty to curb the bad.

If so, consider paying out a bonus for making the grade each month. Of course, it’s your call as to which grades warrant a bonus and how much, if any.

To help kids make the grade, offer this simple study guide for avoiding declines:

  • Check the balance before a purchase. Most cards have handy apps that make checking the balance easy for kids.
  • Watch out for recurring bills. That’s where lots of the kids are going astray with declines. They sign up for services like Spotify and forget to leave a buffer on their cards for when the next billing hits.
  • Remember the PIN. Not only will the wrong PIN yield a decline, but 3 PIN strikes and you’re out. Help your child pick a memorable but secure PIN.
  • Locate the card security code. Typically, it’s on the back next to the signature panel. The code is a security measure intended to reduce fraud when the cardholder is not present for the purchase — like when purchasing online.
  • Match the billing address. Make sure your kid knows the address on file for the card. That’s the address your kid will need to supply for the billing address when purchasing online. If the two don’t match, the transaction will be declined.

After mastering those points, your child will be on the road to an easy A+.

Whether you opt for the carrot, the stick, or just a discussion when it comes to declines, make sure to pay attention. Ignoring bad habits won’t improve them. Turn on card activity alerts to detect declines right away, and coach your kids in real time.

Raising your kid’s money habit grades early will pay big dividends in the future.

Want to turn these tips into action? Check out

Thursday, June 1, 2017

Get Your Kid A Just-In-Time Card For Smarter, Safer Spending

Phone with money request for prepaid card.

More and more parents are ordering “Just-In-Time” spending cards for their kids.

What are those? Prepaid cards used only at the moment of purchase.

Here’s how it works.

Normally, the balance on the Just-In-Time card sits at zero. Earnings from a kid’s chores, odd jobs, allowance, or part-time work accumulate in a separate short-term savings bucket. That savings card or account is never used for purchases directly.

When the child wants to make a purchase, she:

  • Checks the balance of her savings to ensure sufficient funds.
  • Requests an immediate transfer from her savings to her Just-In-Time card for the required amount.
  • Waits for her parent to approve and complete the transfer.
  • Makes the purchase using the freshly loaded Just-In-Time card.

Once notified of the purchase, the parent can return any remaining funds to savings and bring the Just-In-Time card balance back down to zero.

Sound like too many steps?

With the latest app-driven card offerings, the cycle can be competed in real time with just a few taps on a smartphone. More often than not, requests from my kids are sent, received, and approved (or not!) while waiting in line at the register.

Why bother with the Just-In-Time card two-step at all? Four solid reasons:

  1. Reduce impulse buys. Now your child will have to stop, consider, and justify each purchase. He can’t just swipe a loaded card willy-nilly on a whim.
  2. Increase dialog. No more silent purchases. A little discussion (often minimal) will accompany every purchase. More money discussions means more money skills. It also means more comfort with financial transparency — your child’s future spouse or partner will appreciate that. And, as Ron Lieber says: “Every conversation about money is also about values.” Bonus.
  3. Increase earnings on savings. Your kid’s money will spend most of it’s time in savings. If you’re offering a healthy parent-paid interest on his account, the funds can grow nicely. Further incentive not to spend.
  4. Thwart fraudsters. Chipotle, Target, the local restaurant, the gas station down the street, that weird gaming site: they’re all places your kid might use his card. What else do they have in common? They’ve coughed up payment card data to fraudsters.

    The chances keep increasing that any card your kid uses will be compromised and have its data sold off on the dark web. Down the line, someone somewhere will probably use that stolen data to hit your kid’s card with a fraudulent transaction.

    Fortunately, his Just-In-Time card has zero dollars on it. That fraudulent transaction will be declined. You’ll see the alert. You’ll order a replacement card without hassling over lost funds. Easy-peasy.

    Meanwhile, your kid’s savings card hasn’t been used anywhere, so its funds are safe.

With a Just-In-Time card, moving money at the very last moment will help your kid hold onto money over the long haul.

Want to turn these tips into action? Check out

Wednesday, May 24, 2017

Show Kids What The S&P 500 Looks Like

S and P Index Map

Today’s Headline:
Financial stocks lifted the S&P 500 as the index notched a fourth consecutive session of gains.

You and your kids hear the names in the headlines almost daily. The DOW. The NASDAQ. The S&P.

“Dad, what’s the S&P?”

“It’s a stock market index.”

“Oh...What’s that?”

“Ummm... Ask your mom.”

The next time it comes up, don’t dodge it. Don’t pass the buck. But, don’t try to explain it either.

Sit your kid down in front of the interactive map at and show her instead.

  1. What are all those little tiles? Each tile is one of the 500 companies in the S&P 500. Fly over a few with the mouse. Recognize any?
  2. Why is the Apple tile called AAPL? Those initials are like the company’s nickname on the stock market. It’s called the ticker symbol.
  3. Why is AAPL so much bigger than the others? The more valuable the company, the bigger the tile. Apple is killing it. (That’s why they’re building a spaceship for their headquarters.) Can you find Starbucks? Disney? Nike? (Hint: Look in the Consumer Goods section. See the groupings and sub-groupings?) How do the company sizes compare? Any surprises?
  4. What do the colors mean? Green means the company got more valuable today. It’s stock price went up. People were willing to pay more for a share of the stock at the end of the day than at the beginning. Red means it’s value went down. Grey means it didn’t change. Mouse over the company’s tile to see a pop-up chart of how the price fluctuated throughout the day. Who are the big losers? The winners? Any surprises? There’s always a mix.
  5. But some of today’s losers seem like great companies. Did they just have a bad day? Use the little pull-down menu on the left to change the time frame to a longer period. Try 1 month, 2 months, 6 months, a year. What do you notice? What companies are green over all the periods? What about the overall color of all the tiles together? How does that change as the periods change? What’s more likely to be green over time: all the tile colors mushed together or one tile chosen at random? Try picking a few to see.
  6. So who picks these 500 companies anyway? Some group of nerdy economists. They get together and choose the 500 large companies they think are most representative of the overall U.S. economy. How do they figure that out? Go ask your mom...

Why does it matter if your kid knows what an index is? Because one of the world’s richest men and greatest investors, Warren Buffett, has some sage advice: invest in a low-cost S&P 500 index fund.

Now your kid knows what the S&P is and why buying all the stocks in it is a smart play (see #5 above).

And when your kid opens a Roth IRA with that first summer job, she’ll know exactly where to invest the funds for the long term. Move over Warren.

Want to turn these tips into action? Check out

Wednesday, May 17, 2017

Pre-Negotiate Your Teen’s Summer Paycheck Savings Split

Teen On Job In Rickshaw Bagworks Factory

Parent: “How much did you save from your summer job last year?”

Teen: “Umm, nuthin’.”

Sound familiar?

Time for a preemptive strike before summer rolls around again.

As Warren Buffett says, “Do not save what is left after spending, but spend what is left after saving.”

So, negotiate a savings split deal ahead of time.

If your teen agrees to save 27.68% of every paycheck this summer, you will agree to do one or more of the following...

OK, so that last one is more of a mandate than a negotiation. It reminds me of Chris Rock’s definition of allowance.

With the negotiation (or mandate) firmly in place, make sure your teen has separate spending and savings accounts (or cards) ready to go.

When the job starts, help your teen automate the paycheck split if possible. Many employers support splitting direct deposits percentage-wise between multiple accounts. If not, turn on activity alerts for your teen’s main account so you’ll know to manually transfer the right percentage to savings as soon as each deposit hits.

The added payoff for these summer paycheck splitting experiences? Your teen will be more likely to get an early jump on employer matched retirement savings plans later as a young adult. It will just feel natural. Smart move.

So, what should your teen do with all the accumulated savings at the end of the summer?

Start a Roth IRA, of course.

Then, 50 years from now when someone asks your teen: “How much did you save from your summer jobs?”

The answer could very well be: “Oh, about a hundred thousand dollars.”

Compounding over decades for the win!

Want to turn these tips into action? Check out

Thursday, May 11, 2017

Clean Up Your Kid's Spotty Bill Payment Record

Teen with Spotify decline transaction.

51.8% of Spotify’s attempts to bill kids on FamZoo prepaid cards failed in the last 90 days. Yep. Over half. Yikes.

The reason for the vast majority of those failed attempts? Insufficient funds on the card.

Here are the full stats for the Spotify billing attempts:

48.2% Successfully billed. Golf clap.
43.7% Billed amount exceeds card balance.
3.0% Billed to lost card.
3.0% Incorrect card expiration date entered.
1.2% Incorrect card security code entered.
0.9% Failed address verification.

By comparison, in the same 90 days, 98.4% of Chipotle purchases were successful. Hmmm.

Clearly, lots of kids aren’t ready to plan ahead (beyond their next burrito) and responsibly handle a recurring billing arrangement.

But who cares? FamZoo prepaid cards don’t charge any overdraft fees. What’s the harm?

The harm is the habit.

Kids who develop a habit of missing online subscription payments now might be cavalier about missing regular rent payments later. Or student loan payments. Or credit card payments.

That means late fees, mounting debt, and tanking credit scores.

All bad.

So, make sure you’re nipping your kid’s bad payment habit at the bud. Here’s how:

  1. Add responsibility for a recurring payment. Put your kid in charge of handling a regular monthly payment — Spotify, Netflix, a share of the family data plan. Don’t forget to increase your child’s budget based allowance to accommodate the increased fiscal responsibility. Remind your child to maintain a buffer on the card to safely handle the billing when it hits.
  2. Assess a penalty for misses. Review your child’s transactions each month or set up real-time activity alerts so you know when payments have failed. When they do, tack on a penalty. Consider it an overdraft fee from the Bank of Mom or Dad. Missed payments need to hurt.
  3. Insist on a proven track record. Is your teen claiming readiness for a checking account or access to a credit card? Your teen will need to prove it first. Six straight months with zero subscription payment failures feels like a good prerequisite.

Remember, a spotty Spotify record now might mean a spotty credit score later. Make sure your kid faces the music early.

Want to turn these tips into action? Check out

Wednesday, May 3, 2017

Help Kids Squeeze More Than Money Out Of A Lemonade Stand

Squeezing lemonade.

I know it’s Spring because the lemonade stand deposits are trickling into kids’ accounts at A typical entry for an 8 year old reads:

4/24/2017 Cash deposit from lemonade stand $7.00

The deposits from last lemonade stand season — typically late March through September — yielded these fun facts:

  • The average lemonadepreneur was 11 years old.
  • Earnings deposits peaked in June and September.
  • Deposit sizes for transactions containing the keywords “lemonade” and “stand” fell within these ranges:
    Min: $0.50
    Max: $56.10
    Average: $11.47
    Median: $7.00

But lemonade stands aren’t just about lining your kid’s pockets with extra spending money. Don’t let your kid miss out on these additional golden opportunities:

  • Understand the equation: profit = sales - expenses. Don’t gloss over the expenses part. If you let your kids just bank the total sales, you’ll be robbing them of a valuable business lesson on profitability. Show them how to estimate expenses and create an initial budget. Let them know you’ll be fronting the seed capital, but they’ll be reimbursing you for expenses afterwards.
  • Learn sales and marketing techniques. For classic examples, see what Chris taught his 6 year old daughter about getting outside her comfort zone and attracting customers in his thoughtful post: Grown Up Lessons From A Lemonade Stand. At minimum, your kid will meet some new people. That alone is a good thing.
  • Develop some grit. Kids get bored and frustrated when initial strategies fail or sales hit a lull. Chris’ daughter did. But he helped her refine her approach and stick with it. End result: “the lemonade stand was her favorite part of the day.” Good lesson.

So this year, help your kid squeeze more than money out of that lemonade stand.

Want to turn these tips into action? Check out

Wednesday, April 26, 2017

Make Teens Bank The Deductible Before Driving

Teen driver.

Have a teen nearing driving age? Susan N. shared this brilliant personal finance tip on Facebook:

“We required our teens to have the deductible in the bank before they could drive our cars. Only one (so far) has had to pay the deductible.”

A teen “Driving Deductible Fund” is a smart idea for at least three reasons:

  1. It gives your teen some shared financial skin in the game — even when your teen won’t be purchasing a separate car. A financial stake fosters appreciation, accountability, and, in this case, caution! If your deductible is huge, consider mandating a reasonable fraction instead.
  2. It provides a mini education in how insurance works. Your teens will suddenly become keenly interested in the ins and outs of insurance policy deductibles if they actually have to save up for one before getting their hands on your wheels. (If your kids are younger or have no interest in driving, try setting up a family phone insurance company to deliver the lesson instead.)
  3. It’s a great way to introduce the best practice of maintaining an emergency fund. Just think how much less consumer debt we’d have if people learned about emergency funds in their teens!

So, what if you’re lucky enough to have a teen who navigates to young adulthood without exhausting the fund? Roll it over to a general emergency fund or, if your teen is eligible, a Roth IRA.

Even throw in a parent match to sweeten the pot. After all, your kid’s good driving spared you some expenses and a whole lot of parental stress.

Check out these related car finance tips for educating teen drivers:

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Thursday, March 30, 2017

Fully Fund Your Working Teen’s Roth IRA

Teen holding free Roth money from Mom and Dad.

Did your teen pull down a paycheck last summer or during the school year?

Then, it’s time for you to establish a Family 401(k).

Here’s the quick recipe:

  1. Open a Roth IRA account for your teen (custodial account if under 18).
  2. Contribute up to the max possible. That’s usually the total of what your teen brought home since most earn less than $5,500 (or whatever the current IRS Roth contribution limit is).
  3. Invest in a low cost index fund. VTI is my personal go-to choice.
  4. Review, rinse and repeat each year.

Decades from now, your adult child will be sitting on a sizable nest egg — even if your kid falls off the contribution wagon during young adulthood. Compounding over the long haul is that powerful.

But there’s one big problem, you say.

It’s step #2. Your teen already blew all those paychecks on fast food, online games, and streaming music. There’s no money left over to contribute.

Now what?

Just gift the contribution money to your teen. If you can’t cover it, hit up the grandparents, aunts and uncles.

Huh? Why should you just hand over free Roth contributions to your teen? Isn’t that sending all the wrong messages?

Not in my book. Think about it.

Even if you as the parent gift the entire contribution, here’s why it’s a neat way to pass money to your kids while signaling all the right messages:

  • It’s contingent on getting a job and bringing home a paycheck.
  • It shows the power of patient investing and tax free growth.
  • It’s a great excuse to talk to your kid about investing every year.
  • It increases the probability your child will quickly jump on future matching opportunities, like an employee 401(k) plan.
  • It puts your kid solidly on the path to a financially independent future.

The bottom line: funding (and even fully funding) your teen’s Roth IRA now is a lot healthier than plopping a large lump sum in your kid’s lap later when you kick the bucket.

Want to turn these tips into action? Check out

Wednesday, March 22, 2017

Cut Your Kid In On A Share Of The Coin Jar

Coin Jar With Share Note From Dad

While researching anonymous transaction data on our family finance site today, I stumbled across this delightful deposit for a 7 year old:

03/20/2017 $8.62 For counting Dad’s coins

I love it! Use your spare change jar to creatively engage your youngster in some personal finance basics.

Offer your kid a deal. If she stacks your spare coins into neat little $1 piles, you’ll let her keep a hefty share.

Convert her piles into crisp dollar bills, or deposit the equivalent sum right into her account.

She’ll be surprised how much money accumulates in a change jar over time. I bet $8.62 was an exciting windfall for that 7 year old.

It’s an important personal finance lesson: even micro savings can add up to significant sums over time.

In fact, if the sum is anything north of trivial, encourage your child to split the bounty between spend, save, and give buckets. (See tips on choosing the right percentages here.) Separating funds into purpose-driven partitions is an effective money management technique. Help your child form the habit early.

So, don’t let your change jar just sit there collecting coins. Use it to dispense some valuable financial wisdom to your kids.

P.S. Got teens? Try setting up a swear jar, and let the proceeds flow to the family instead!

Want to turn these tips into action? Check out

Wednesday, March 15, 2017

Audit The Household Utility Bill With Your Kids

Kids Running Through Water

Quick quiz. Which utility costs your family more?

  • Water,
  • electricity,
  • gas,
  • garbage/sewer, or
  • cable/Internet?

Yeah, I wasn’t quite sure either.

I actually thought water would top the list since we’ve been living through a severe multiyear drought in our area. Nope. Electricity and the cable/Internet combo are neck and neck at the top. In fact, our combined sewer/refuse charges are more than double our water cost!

And most kids probably don’t realize all those things cost anything at all.


Ummm. Because you never told them!

The next time your utility bill arrives. Call the kids over. Ask them to guess how much each utility costs. Reveal the numbers. It can be a real eye opener.

If your utility bill is like mine, it actually has some pretty interesting details inside. The data and charts make good fodder for a family finance discussion.

I can see the monthly usage trend for electricity, gas, and water over the past year. One stays fairly flat. One dips in the summer. One dips in the winter. Challenge the kids to explain the seasonality.

I can see a usage comparison to the previous year. Electricity and gas are up from last year. Water is down. Why? What can we do as a family to reduce usage? Do we really need every light on in the house? Can we wear our sweatshirts instead of cranking the heat?

I can see the average daily cost for each utility by month too. How do the daily tallies compare with what your kids make in weekly allowance or odd job payments or birthday checks? How does the monthly total compare to your teen’s summer job earnings? Those comparisons will get their attention.

You and your kids might be wondering how your utility costs compare to what others are paying. Check out Numbeo to look up costs in your area. shares stats for typical US families in Utility Bills 101. How does your family stack up? Are there logical reasons for exceeding the averages?

If the utility audit bores your kids, there’s one sure-fire way to get their attention. Propose divvying up the bill and charging each kid for their fair share like we do with our cell phone data plan. Suddenly, utilities just got a lot more interesting!

Interested or not, your kids will at least be more informed. It’s important to know that the everyday basics we often take for granted cost money.

After all your quick quizzes on the utility bills, your kids will be more prepared for the big test someday: venturing out on their own financially.

Want to turn these tips into action? Check out

Wednesday, March 8, 2017

Pick An ETF To Make Investing Lessons Fun And Smart

Child holding Disney egg from basket

The classic way of teaching kids about investing is all wrong. Sure, owning a share of Disney (or some other favorite company) makes investing familiar and interesting. But it’s a dumb investment strategy.

The smart investment strategy is to buy your kid a low cost, broad market index fund. But that’s pretty abstract and boring.

That’s why I’ve suggested setting up a competition between a familiar stock and an all-market index fund to get the best of both worlds — like my son’s competition between CMG and VTI.

But a dad named Allyn offers a simpler way to keep investing lessons fun and smart. Here’s what he did with his daughter:

“Just a month or so ago she started with her first ‘investment’ in FDIS (with her own money and a ‘matching grant’ from her parents) as it holds pieces of the few companies she knows by name and likes (most notably Disney and Apple).”

Brilliant! Buy an ETF containing a basket of familiar stocks instead of betting on a single favorite stock.

The top 10 holdings in FDIS right now are: Amazon, Comcast, Home Depot, Walt Disney, McDonalds, Priceline, Starbucks, Time Warner, Nike, and Lowes. Most of those are names your kid can relate to. And, the expense ratio of FDIS is nice and low at 0.084%. Diversified. Low cost. All great investing messages for your kid to absorb.

If your kid has a specific interest, you might be able to find a decent targeted ETF to match. Gaming enthusiast? Maybe GAMR. It’s smarter than just picking one gaming stock. But be careful. The more narrow, the more risky. Keep an eye on the expense ratio too.

So, pick an ETF instead of a single stock to teach your kid about investing. You get familiarity and diversification all in one neat little package.

That makes your child’s introduction to investing both fun and smart.

Want to turn these tips into action? Check out

Sunday, March 5, 2017

Make Saving Money Right Again!

William Shatner Video Thumbnail

Our Micro Money Message series delivers favorite family finance tips in a quick video format. Each one is designed to help you encourage your kids to adopt responsible and thoughtful money habits.

Here’s a listing of the first 35 episodes:

  1. Take Your Time With Money Decisions — Help your kids avoid hasty money decisions like silly purchases or risky investments.
  2. The Two-Way Power of Philanthropy — Challenge your kids to a random act of helpfulness this weekend.
  3. Luck And Work Go Hand In Hand — Show kids the relationship between luck and work.
  4. Know Your Money Leaks — Teach kids to mind their little money leaks so they can keep their financial boats afloat.
  5. Tell Your Dollars Where To Go — Show kids how to tell their dollars where to go rather than asking where they went.
  6. Own The Whole Market — Picking individual stocks is like finding needles in a haystack. Instead, follow this simple recipe for getting your teens in the investing hunt.
  7. Use a Hybrid Card Strategy — Credit cards build a credit history, but they don’t prevent debt. Prepaid cards prevent debt, but they don’t build a credit history. So which one is best for your older teen?
  8. Spark The Independence Flame — A simple recipe for sparking the flame of financial independence within your child.
  9. Let Kids Choose The Spend-Save-Give Allocation — How to help your kids strike the right financial balance.
  10. Prompt the Philanthropy Discussion With Great Quotes — Make philanthropy a regular part of your kid’s vocabulary and give that Giving Jar a whole new meaning.
  11. Convert Prices To Work Units to Teach Kids The Value Of A Dollar — A simple way to make kids appreciate the value of a dollar.
  12. Use The Rule Of 72 To Turn A $20 Birthday Check Into $1,280 — The Rule of 72 is a great way to teach your kids what money invested today could be worth in the future.
  13. Play The Sweep-To-Savings Game With Your Teen — An easy way to gamify frugal spending habits with your teen.
  14. Reward Your Kids With Mom/Dad Dollars — Paying for chores can be an expensive and questionable proposition — unless, of course, you’re printing your own money. Here’s how and why to do just that.
  15. Give Your Teen Cash Back Rewards For NOT Spending — What’s in your teen’s wallet? Here’s how to deliver a parent-financed cash-back bonus card that rewards your teen for NOT spending.
  16. Run A Family Banking System With Prepaid Cards — Prepaid cards are excellent financial training wheels for your kids. Here’s how to set up a family banking system with prepaid cards that teaches your kids good money habits without the risk, hassle, or hidden fees of credit cards and bank debit cards.
  17. Put Some Pain In Your Kid’s Cashless Payment — Here’s how to put a little “pain” in your teen’s cashless transactions to foster cash-like spending habits. No pain, no restrain.
  18. Add An Emergency Fund To Your Kid’s Money Bucket List — Why wait until your kids leave the nest to teach them how to take the first baby step out of financial distress? How to introduce your kids to emergency funds now.
  19. Teach Kids A Simple Secure PIN Strategy — Kids struggle with proper PIN management. Here’s a simple recipe you can teach them to create and remember secure PINs.
  20. Use Reimbursements To Teach Teens The Value Of A Dollar — Make teens active participants in the everyday expenses you’re picking up. That way, they’ll know — and appreciate — the real value of a dollar when the day comes for everything to be on their nickel.
  21. Make Kids Journal Their Money Requests — Here’s another way (aside from a budget-based allowance) to put the brakes on impulsive extra money requests from your kids.
  22. Tell Teens To Take More Risk — There’s one area where teens need to pump up the risk if they’d like to enjoy a healthy future: investing. This video gives parents a recipe for getting them started. It’s called the Family 401(k).
  23. Make #GivingTuesday Your Kid’s Annual Habit — Here’s a recipe for instilling a philanthropic habit in your kids by anchoring it to the annual event known as #GivingTuesday.
  24. Turn Why Into How When Kids Whine About Money — How to turn whining into problem solving when your kids want to buy something.
  25. Hold Teens Accountable For Big Fines With A Parent Payment Plan — When teens incur bigger fines than their accounts can handle, parents often pick up the tab. Here’s a better solution.
  26. Nudge Your Kid’s Charitable Impulses With Giving Data — How much are your kids allocating to charitable giving? This data might be just the nudge your kids need to up their charitable games in the new year.
  27. 6 Reasons To Stop Giving Cash To Your Teens — Are you still handing cash over to your teens? Here are 6 reasons to replace the dollars with a card. Get clean, safe, transmittable, tracked, online, and real with a prepaid card instead.
  28. Make Kids Pay The Sales Tax — Kids often don’t have a clue about how much things cost or that sales tax even exists. Here&rsquos a clever and affordable way to make your kids mindful of both.
  29. Let Kids Gift Service Bucks Instead Of Stuff — If you want your kids to be thoughtful gift givers, but you don’t need any more stuff, here’s a solution.
  30. Set Up A Smart Competition To Make Investing Lessons Fun — Betting on a favorite stock is fun but stupid. Buying an index fund is smart but boring. So how do you make smart investing lessons fun for kids? Here’s one way.
  31. Try A Use-It-Or-Lose-It Allowance For Obsessive Young Savers — Some kids have a spending problem. They don’t spend at all. Here’s how you can help a young obsessive saver loosen up the purse strings a bit and enjoy money instead of just hoarding it.
  32. Bill Kids Weekly For Their Share Of The Best Deal — Here’s how you can pay for your kids’ up-front or family subscription plan to get the best deal while still holding them accountable for their fair share.
  33. Offer Kids A Savings Match (With Strings Attached) — Encourage your kid to save by offering a matching contribution, but attach some strings to send the right message.
  34. Reward Your Kid With A Spot Bonus Today — A spot bonus is a great way to brighten a kid’s day. Here’s what other parents are doing.
  35. Encourage Kids To Be Name-Callers When Saving — Teach your kids that name-calling is a bad habit, except when it comes to saving money. Here’s why.

Episode 36, Make Saving Money Right Again, just went live. Check it out.

Here’s the transcript:

Hey, Bill here. As always, thank you for the nice mentions on social media.

A recent survey of 7,000 American adults found that 34% had zero dollars in a savings account.

And, a whopping 69% had squirreled away less than $1,000 in savings. That’s worse than 62% the year before. American adults are trending in the wrong direction on savings.

It made me wonder how our kids are doing.

So, I ran some numbers on

Here’s what I found: in a sampling of 6,515 kids, 44.3% had zero dollars tucked away in a separate savings account. That’s about 10% worse than the adult survey stat.

We can do better.

If you need some ideas, stop by You’ll find tons of my favorite savings tips for kids of all ages.

You know, William Shatner has one of my favorite savings quotes: “If saving money is wrong, I don’t want to be right.”

But, hey, let’s make it easy on our kids. Let’s make saving money right again. Then, we can reverse the savings trend for the next generation.

Want to turn these tips into action? Check out

Thursday, February 23, 2017

Celebrate America Saves Week With Your Kids

Boy holding card with American flag drawing.

Next week is the perfect time to jumpstart, reassess, or fine-tune your savings game-plan.

Why next week?

It’s America Saves Week, a national campaign designed to get you off your savings duff. You’ll be in good company. Over 40 thousand people pledged to save during last year’s campaign.

And you’ll want to include your kids too.

Why? Because money habits can settle in as early as age 7. And, sadly, most kids aren’t learning much about money in school. That means it’s up to you, and you need to get started. Now.

This year, the team at America Saves Week is promoting 6 saving strategies. Here’s how you can apply each one to your kids.

Strategy 1. Automate Your Savings

Wait. How do you automate deposits to your kid’s piggy bank?

These days, it’s easy. Move the piggy bank to the cloud, access it through an app, and automate the splitting of deposits between separate spending, saving, and giving accounts. (Not sure about the best percentages to use? Check here.)

Oh, and while you’re at it, pay your kids an extremely generous Bank-Of-Mom/Dad interest rate. They deserve something much more compelling than the near-zero rate you’ll find at a real financial institution these days. Motivation matters.

Kids who automatically save a portion of their allowance, chore, odd job, or gift money throughout childhood won’t flinch at automatically deducting savings from their paychecks as adults. Socialize the pay-yourself-first concept as early as you can.

So how do kids access their “cloud piggy bank” money? They use a prepaid debit card or a bank debit card.

Hey, hold on! Shouldn’t kids only use cash?

Well, only if you also believe kids should only use slide rules to solve math problems. It’s 2017 people! Try jamming coins in an iTunes account. Not.

Seriously though, here are 6 (or, maybe 5) reasons your kids should stop using cash.

Strategy 2. Save As A Family

This one is more obvious. There are tons of things you can do to turn saving into a family exercise. Here are 10 ideas. Try one or two.

Strategy 3. Save Now For Retirement

Save for retirement? Before your 20s?

Yes, indeed.

As soon as your teen brings home that first paycheck from a summer job, jump on it. That’s when you want to roll out the “Family 401(k)” plan. In a nutshell, that means: open a Roth IRA, offer a parent (and even a grandparent) match to help max out the allowed contribution, and stash it in a low cost, broadly diversified index fund for the long haul. Rinse and repeat year after year. The power of starting early is incredible.

You’ll find more info about the Family 401(k) idea, and how I “sold” it to my teens here. It’s easily one of the smartest financial parenting moves I’ve ever made.

Strategy 4. Save At Tax Time

Tax refunds? Kids?

Again, with working teens, this can be a surprise savings opportunity. That’s because many teens have no idea how to fill out a W-4. As a result, many end up accumulating unnecessary tax withholding at the end of the year.

That’s when you can teach your teen how to file taxes for free, snag that refund, and plunk it in the Family 401(k) — see above.

For youngsters who have no clue what taxes are all about, give them a quick (if not traumatic) introduction with the Conan O’Brien method.

Strategy 5. Pay Off High Interest Debt

High interest debt? Kids?

Let’s certainly hope not. Fortunately, youngsters can’t get their own credit cards. And please tell me they aren’t running around with yours! That said, be sure to explain to kids how credit cards work. They see you using yours all the time, so you need to fill them in. Try a conversation like this one.

Then, let your kids cut their card-carrying teeth on a family friendly prepaid card. Find one with with no risk of debt or overdraft fees. Don’t let your kids graduate to a credit card until they pass the No Decline Challenge for at least 6 months. When they’ve proven they’re ready, consider this hybrid prepaid/credit card approach to safely build a credit score while staying on budget.

Oh, and never make loans to your kids, right?

Actually, I beg to differ. Getting an early taste of the burden of debt and how to responsibly pay it off is something I want my kids to experience early. Better to experience that now under my watchful eye rather than later when the the stakes are high. That’s why I let each of my kids take out loans from the Bank Of Dad for big ticket items, like laptops. Deducting loan payments from allowance and chore earnings for months on end is a real eye opener for a kid. Before long, loans lose their luster.

Strategy 6. Save For Emergencies

Yes, kids — and especially teens — have emergencies: that third lost sweatshirt, that first parking ticket. So add an emergency fund bucket to your kid’s spend-save-give system. I’ve found kids actually take a great deal of pride in being able to bail themselves out.

Just think how much less debt there would be in America if every kid learned to maintain an emergency fund, long before getting that first credit card. Why wait?

At minimum, make sure your kid knows that a credit card is not an emergency fund.

You Don’t Have To Be Perfect

But wait, there’s one problem, you say. How can I counsel my child on these savings strategies if I haven’t mastered them myself? Not to worry. You don’t need to be perfect to help your kids learn good money habits. You just have to be willing. You can all learn together.

Who knows? Getting more kids to save during America Saves Week might just save America.

Want to turn these tips into action? Check out

Wednesday, February 15, 2017

Urge Your Kids To Save More Than 34% Of American Adults

Teen holding a penny saved. asked 7,000 American adults:

How much money do you have saved in your savings account?

The sad answer? 34% had zip, zilch, nada.

And a whopping 69% had squirreled away less than $1,000 in savings. Worse still, that percentage was up from the year before which weighed in at a lower but still appalling 62%.

We’re moving in the wrong direction, people.

So, what does that mean for the next generation? Scary.

If we’re going to reverse this downward savings trend, we better not only start saving more ourselves, but encourage our kids to do the same.

How? Try some of these tips:

  1. Let your kid choose the spend-save-give allocation.
  2. Nudge your kid’s saving impulses with this data.
  3. Pay your kid more interest on savings than any bank would.
  4. Show your kid how to compartmentalize money.
  5. Offer your kid a savings match (with strings attached).
  6. Show your kid 75 random things other kids are saving for.
  7. Tell your kid this savings story with a surprise ending.
  8. Teach your kid these automated savings tricks.
  9. Encourage your kid to be a name-caller when saving.
  10. Show your kid this $2M picture of an early savings start.
  11. Play the sweep to savings game with your kid.
  12. Impose a savings tax on your kid’s saving.
  13. Harness your teen’s irrationality to build up savings.
  14. Add an emergency fund to your kid’s money bucket list.

With the stats showing adults faring so poorly with savings, it made me wonder: how are kids doing?

A T. Rowe Price online survey of 1,086 parents found that 79% of kids had either a savings account or a piggy bank. That’s encouraging!

Not so encouraging? A UK survey revealed that 46% of parents are raiding their kids savings. Not cool.

But what parents say on a survey and what they do in reality often diverge.

So, I ran some numbers today on our family finance site to get a reading on what families are really doing.

Here’s what I found in an anonymous sampling of the data from 6,515 kids who belong to currently subscribed FamZoo families:

Balance in Savings Accounts Percentage of FamZoo Kids
$0 44.3%
Less than $100 21.3%
$100 - $499 22.9%
$500 - $999 5.93%
$1,000 or more 5.6%

So, the percentage of kids who have zero dollars stashed in a FamZoo savings account is roughly 10% worse than American adults.

We can do better.

As William Shatner said: “If saving money is wrong, I don’t want to be right.”

Fine for a famous maverick, but let’s make saving right for our kids. Then, maybe we can buck the downward trend.

Want to turn these tips into action? Check out

Wednesday, February 8, 2017

Reward Your Kid With A Spot Bonus Today

Spot Bonus Change Jar

Lots of companies reward employees with spot bonuses. It always feels good to be recognized on the spot for a job well done.

What if parents rewarded kids with spot bonuses too?

Lots of parents are doing just that on our family finance site.

Check out this sampling of recent spot bonus reasons pulled from anonymous transaction data:

  • “Bonus for a Great Wednesday Folder!”
  • “Great job on Math!”
  • “Excellent report card. You make me so proud.”
  • “Good week of class.”
  • “A on unit 8 math test — great job!”
  • “Very good job on the english quiz”
  • “Great report card!”
  • Study hard bonus — thank you”
  • “Great Soccer Games!”
  • “6 steals!”
  • “80-mile bike mark”
  • “Being super awesome at Karate”
  • “Black belt test”
  • “Caught using the same cup!”
  • “Good rule-following during sleepover”
  • “For helping around the house without being asked. :-)”
  • “Studying 4 days, keeping room picked up, no troubs in school. Thanks bud!”
  • “Great job accepting a ‘no’”
  • “No incidents”
  • “For making good grades and being good. Smooch!”
  • “Great job keeping your room clean every night for 2 weeks in a row!”
  • “Great Listening!”
  • “Bonus for being helpful and having a positive attitude”
  • “Being Super Helpful!!!!”
  • “Helping when no one else did”
  • Helped without complaint
  • Bonus for helping me make lunch. Thanks!”
  • “Thanks for helping blow the driveway.”
  • “Helping straighten house for party”
  • “For helping Dad with lights”
  • “For finding last 2 ornaments
  • “Great job helping me on Sunday”
  • “Helping paint and clean up jobsite”
  • “Helping Grandpa”
  • “For helping in the garden”
  • “Help with cleanup for realtor”
  • “Helping dad at work”
  • “Helping at church”
  • “Helped with making Curry Chicken”
  • “Help with groceries
  • “Clothes off floor!”
  • “Mated 2 pair of socks”
  • “For cleaning up the kitchen by yourself. Nice job!”
  • “Cleaning house today, thanks!”
  • “For cleaning the window ledges! Thank you.”
  • “For doing dirty dishes — Thank you.”
  • “Doing the dishes with your sister”
  • “Good Morning Bonus!”
  • “So proud of you!”
  • “For being awesome!”
  • “Random action of kindness

See a match for your kid?

If you don’t like the idea of a monetary reward, try a non-monetary one: staying up an extra hour on the weekend, an extra hour of computer or gaming time, a sleepover with friends, an ice cream, a movie, or whatever privilege or treat your kid treasures.

The words accompanying your spot bonus make a big difference too, whether delivered by a surprise account activity alert or in person.

My favorite good-vibe-inducing spot bonus keyword is proud, as in: “I’m proud of you.” I’ve found it’s a sentiment that warms the heart of even the most jaded teen.

So, catch your kids doing something good today. Then reward them with a bonus and a kind word.

Want to turn these tips into action? Check out

Wednesday, February 1, 2017

Offer Kids A Savings Match With Strings Attached

Matched dollar bill faces.

“I sure wish I had taken advantage of my employer’s 401(k) match!”

Sound familiar? It’s a regret uttered by countless aging adults grappling with financial reality. They missed the money boat.

Don’t let your kids miss the same boat. Condition them to recognize and seize one of life’s rare free money opportunities: the matching contribution.

Set up a family savings match opportunity, so your kids recognize the benefits early on. Here are a few angles to consider:

  • Set terms. Real matching scenarios aren’t completely free. They come with strings attached: no touching the money until a certain age, early withdrawal penalties, qualified spending restrictions. Make sure your matching scheme includes similar restrictions. “To get this 50% match, you can’t touch the money until you get your driver’s license. After that, the funds can only be used for car expenses like gas or repairs. If you pull the money out early for something else, you’ll forfeit all the parent matching contributions that were made.”
  • Interest versus match. If you’d like to encourage everyday saving for less restricted purposes without all the strings attached, try parent-paid interest instead. See how that works here.
  • Engage grandparents. See if the grandparents would be interested in matching the grandchildren’s savings contributions. Explain what you’re trying to teach your kids. Many grandparents will leap at the opportunity to connect with grandkids over personal responsibility topics like financial literacy.
  • Consider a Roth IRA. If your teen earns W2 income through a summer or part-time job, look into setting up a Roth IRA and offering a matching contribution (within eligibility limits). To see what I’ve done with my teens, see here. It could be a million dollar opportunity.

How much should you match? That’s entirely up to you. Curious what other parents are doing? The most popular matching deals currently offered by parents on our family finance site are: 100%, 50% and 10%.

But, hey, it’s free money. Any match will do.

Here’s what really matters: someday when your kid’s first HR rep asks, “Would you like to take advantage of the company match?”

Your kid will chuckle, “Of course! I've been taking the match deal since I was 10!”

No regrets.

Want to turn these tips into action? Check out

Wednesday, January 25, 2017

Bill Kids Weekly For Their Share of The Best Deal

Teen enjoying music with siblings

Pay up front, save a bundle. Lots of services offer kids a reduced rate for committing to an extended time-frame in advance. Buy the 6 month World of Warcraft subscription instead of paying monthly, save $24.00 per year.

The problem: lots of kids can’t afford the up-front cost, so they take the cheaper, but ultimately costlier, pay-as-you-go option.

Pay as a group, save a bundle. Lots of services offer a reduced group or family rate. Pay $14.99/month for the Spotify family plan instead of two regular plans plus two student plans, save $179.64 per year!

The problem: lots of parents pick up the tab for the whole family, while the kids pay nothing. Suddenly kids develop the mistaken impression that shared services are free.

The solution to each of these problems?

Buy the best deal for your kid — up-front or family plan. Then bill your kid each week or month for the appropriate partial share. If your kid has an online account, automate the billing to eliminate the hassle of remembering.

Lots of parents are doing this with their kids on our family finance site. Parents are billing their kids for cell phone plans, Wizard 101, Xbox Live, Roblox, Minecraft Realms, Fantage, Club Penguin, Animal Jam, World of Warcraft, iCloud storage, Apple Music, Spotify, Marvel Comics Unlimited online access, Netflix, Hulu, Gamefly, WORLDteen, Six Flags season passes, gym memberships, sports team fees, musical instrument rentals, the Yousician music teaching app, access to the family car, pet insurance, you name it.

Try the approach in your family.

Your kid learns about pricing plans. Educational.

Your kid and your family get the best deal. Frugal.

Your kid pays their fair share. Accountable.

It’s a good deal all around.

Want to turn these tips into action? Check out

Wednesday, January 18, 2017

Try A Use-It-Or-Lose-It Allowance For Obsessive Young Savers

Use it or lose it money from Dad

“We are not to judge thrift solely by the test of saving or spending. A wise balance between the two is the desired end.” ~Owen D. Young

Not every kid has a spending problem. Some have a saving problem.

What does that mean? Some kids are so afraid to spend money, they never treat themselves or others to anything. Ever.

They’ve developed an irrational fear of spending.

You’re rightly telling your kids that money is a precious resource, and spending it on things they don’t value is unwise. But they may just be translating the message to: "spending is bad."

Spending money on things that give you and others joy is good. In moderation, of course.

So how can you get your obsessive young saver more comfortable with responsible spending?

Try a use-it-or-lose-it allowance — a small weekly stipend for guilt-free, joy-inducing spending.

Your child can use it to treat herself (or the two of you) to something modest each week. An ice cream. A cup of coffee. A donut. Admission to a museum. A movie. You might need to kick in a little extra sometimes too.

If the money doesn’t get used, poof! The leftover gets swept back into mom or dad’s account. Use it or lose it. No missed savings opportunity to agonize over.

Help your kids discover that moderate spending on things or experiences that bring joy is good. Saving every single little penny isn’t thrifty. It’s miserly. Help your kid find the right balance.

P.S. On a different but related note, I deployed a use-it-or-lose-it approach with my teens’ clothing allowances. My boys would just as soon go naked and abscond with the leftover funds. So I eliminated that opportunity with a use-it-or-lose-it provision. Do you have your own use-it-or-lose-it money example?

Want to turn these tips into action? Check out

Wednesday, January 11, 2017

Authorize DIY Projects To Hone Your Kid's Money (And Life) Skills

Son With Home Built Gaming Computer

Your kid has big DIY project ideas. Build an awesome gaming computer. Construct a skateboard ramp. Redecorate the bedroom.

As a busy parent, your first instinct is to hedge.

“Time suck!” you’re thinking. Let your kid take charge.

“Money suck!” you’re thinking. Demand a budget.

“Bound to fail!” you’re thinking. Lower your bar. Besides, your kid just might surprise you.

Years ago, I was skeptical when one of my sons (13 at the time) wanted to build his own gaming computer — one that would be more powerful and less expensive than a high-end off-the-shelf model. Sure kid.

I finally relented and authorized the project.

He researched and picked the parts, optimizing for the perfect balance of price and performance based on his specific needs.

We chased down obscure assembly instructions together online.

We battled through some software hiccups and compatibility issues together.

We — but mostly he — succeeded.

He learned to research, to compare, to budget, to be resourceful, to troubleshoot, to persevere.

I learned to let go of the reins a bit.

We bonded.

Recently, a mom on a popular NPR personal finance Facebook group reported a similar DIY experience:

“For Christmas, I gave my 11-year-old daughter a certain amount of $ for decorating her new room. This turns out to be a GREAT practical money management exercise for kids. She is online researching chairs, rugs & bedspreads. She is learning what things cost, about trade offs, taxes, and how to get everything she wants while sticking to her limit or less. I highly recommend it to parents!”

I won’t need to see any “after” pictures of her daughter’s room to declare that DIY project a winner. Look at those money (and life) lessons. Pure gold.

So, what DIY project can you authorize for your kid?

Want to turn these tips into action? Check out