Thursday, August 24, 2017

Teach Kids How To Read The Free Trial Fine Print

Free trial fine print.

“We’re calling about a charge on Johnny’s card. He says he never bought this service.”

We hear that a lot at our family finance site.

More often than not, Johnny did buy that service. Eventually.

Of course, it started out free. And “free” is the only keyword Johnny saw or remembered.

Time to teach Johnny to look for another keyword: “cancel”.

In fact, here’s a good rule for your card-toting kid:

No subscribing without learning how to cancel first.

If your kid can’t locate the cancellation instructions, then either your kid is not ready, or the service provider is too sketchy.

Be sure to review the cancellation terms in full. Some providers levy hefty extra fees for early cancellations. Check out this MoviePass example.

Sadly, lots of online services prey on unsuspecting or un-savvy kids. A classic example from a FamZoo customer service interaction:

“My daughter signed up for a “free” on-line subscription, thinking that it was free, but then keyed in her card and is now getting monthly fees — of $34.95 and $39.95.”

We’ve seen specific complaints about MovieLush and ReelHD to name a couple.

Be sure to turn on card activity alerts so you can be on the lookout.

If you notice a sketchy or unfamiliar charge, show your kid how to google the description along with the keyword “cancel”. You’ll either find instructions from the provider or stories from other bilked consumers that might include a hidden cancellation recipe. If a charge is not legitimate and the merchant refuses to refund it, show your child how to file a claim for the unauthorized charges.

Rule number two for your card-toting kid:

No free trial without a cancellation reminder.

Have your kid enter the reminder on an online calendar or a checklist that will trigger an alert a few days before the end of the free trial period. Include the cancellation instructions found from Rule 1.

That way, your kid will have ample opportunity to not buy the service if it turns out to be less than expected.

With a little education, we can keep those mystery charges off little Johnny’s card.

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Wednesday, August 16, 2017

20 Back To School Family Finance Tips for Kids K-12

Kid headed to school.

It’s back-to-school season.

Let’s kick it off on the right financial foot.

Whether you’ve got kids headed to kindergarten, elementary school, middle school, or high school, you’ll find an idea or two to try here:

  1. Start money conversations by kindergarten with these classic books — The traits, habits, and behaviors that lead to financial well-being start to gel as early as preschool. Here are nine books to get your youngster headed in the right direction.
  2. Roll out the Premium Price Rule while back-to-school shopping — Impulsivity and peer-pressure can blow a hole in the back-to-school budget. Focus your kid on value and get some shared skin in the game with the Premium Price Rule.
  3. Go refurbished on the back-to-school computer — The sooner your kids learn they don’t need the latest, greatest shiny object, the shinier their financial futures will be. If your kid needs a computer for school, it’s a perfect opportunity to make that point. Here are some key things to consider when going the refurbished route.
  4. Fix your kid’s allowance — Are you doing allowance right? Here’s a six point checklist to find out. The beginning of the school year is a good time for a tune-up.
  5. Boost college savings with an allowance — It seems counter-intuitive that giving kids an allowance could help parents save for college. Here’s the behavioral finance trick to making it work.
  6. Pay for studying, not the grade (if at all) — Do you have an opinion on paying kids for good grades? Either way, you’ll want to check out this study. It might change your mind.
  7. Plan your lost coat strategy — It’s inevitable. Your kid is going to lose a coat at school this year. At least once. It can get expensive. Here are some ideas for planning your parental response.
  8. Get your kid a card by middle school — The data from our family finance site shows that middle school is the perfect time to start putting plastic in your kid’s hands. As long as it’s the right plastic, with the right controls, no risk of debt, and plenty of educational features. Check out the age distribution data for FamZoo cards.
  9. Show your kid the average price of a homemade sandwich — Your kid could save you almost $500 during the school year by eating a homemade sandwich instead of a quarter pounder with cheese. Here’s the data.
  10. Pay your teen to brown bag it for lunch — As kids get into the teen years, frugal habits like the brown bag lunch come under pressure. Here’s one way to make the brown bag lunch cool, or at least profitable, for your teen. You can afford the bribe. You’re already saving over $500 with the homemade sandwiches (see above).
  11. Use real stats to set fast food boundaries — Brown-bagging it or not, junkets to the local fast food joint are a classic teen rite of social passage. Use these purchase statistics to set reasonable boundaries.
  12. Get ready for that Starbucks peer-pressure — The data from our family finance site pinpoints when kids start to feel the pressure (or desire) to head off for Starbucks. How you can prepare.
  13. Help kids rehearse for awkward money scenes with friends — “Come on, let’s go get pizza. It’s only 10 bucks. You can afford it!” When it comes to your kid’s money dialog with friends, ditch the improv. Here’s how to script a solid response ahead of time.
  14. Help your kid embrace a frugal persona — The “strategy of identity” can help people form desirable habits. Here’s how to apply the strategy to your kid’s money habits in the face of peer pressure.
  15. Encourage your kid to learn to code — If you have any opportunity to expose your kid to writing software. Do it. Here are 223,054 reasons why.
  16. Put your kid in charge of a narrow budget — It’s shocking how many kids enter college with zero experience managing a budget. Don’t let that happen. Try this simple strategy this school year.
  17. Reward your student with a spot bonus — Spot bonuses. They always make you feel appreciated as an employee. They’ll make your kid feel appreciated too. Catch your kid doing something good this school year. 56 examples from real parents.
  18. Don’t necessarily discourage a part-time job — It’s a shame that fewer and fewer students are holding down part-time jobs while in school. Here’s evidence we should reverse that trend.
  19. Show teens there’s a scholarship for that — Your kid may think that scholarship opportunities only exist for math and science whizzes. Not true. There's a scholarship out there for darn near anything. Even drawing ducks. Show kids how to find them.
  20. Review 529 statements with your teen every quarter — Here are 6 valuable lessons your teen can learn from 529 statements if you’re willing to make a 15 minute investment every 3 months.

Kids aren’t learning much about personal finance in school. So, if you only do one or two of the above, you’ll still get a gold star in my grade book.

Want to turn these tips into action? Check out

Wednesday, August 9, 2017

Post Wants On The Fridge To Chill Your Child's Spending

Purchase sticky on fridge.

I love the delayed gratification system Joanna Hampton’s parents instituted for purchase requests over a certain dollar amount:

  • Write the desired purchase on a piece of paper. Sign it. Date it.
  • Post the paper on the family fridge.
  • Wait the agreed upon number of days.
  • Make the purchase. Or not.

Often, the bloom falls off the rose long before the waiting period is up.

The duration was 30 days in Joanna’s case, which seems a bit long. Pick what makes sense for your kids. In fact, you might scale the waiting period with the price: over $20? 2 days. Over $50? A week. Over $100? A month.

The digital variation on the fridge setup would be to have your child register the desired purchase in a text message, or in a shared google sheet, or on a shared google calendar, or via a money request in FamZoo.

Fridge or no fridge, it's a simple, effective system for putting the chill on instant gratification.

Looking for some other tips for delaying gratification? Try:

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Thursday, August 3, 2017

Pay Your Kid To Do Some Dirty Work

Dog with mouth open wide.

In my anonymous tour through recent transactions on our family finance site today, I found this gem for an industrious 11 year old:

Bonus cleanup of dog throw up $5.00

One parent’s dirty work is another kid’s economic opportunity.

I won’t regale you with the keywords I used to locate similar transactions, but it turns out the bowser barf bonus comes up (so to speak) from time to time. Payments range from $3 to $5.

And barf pays better than the other end. The average pup poop patrol payment hovers around $1.00.

Or, you could shift to rats:

Change rat bedding $1.50

And finally, number two apparently beats number one according to this item:

Empty pee bucket $0.25

Hmm, I don’t want to know either, but let’s assume it’s on a farm somewhere!

On the less dirty and more lucrative side of the ledger, we have:

Washing Dogs and Cleaning Kitchen $13.00
Upholstery cleaning $25.00

Wondering how much to shell out for that dirty job? You might be able to calibrate your offer based on this payment data for more normal chores.

If you can’t think of any dirty jobs for your kids to do, how about some dangerous ones instead?

Otherwise, challenge the kids to come up with opportunities themselves. And let them negotiate their own compensation. It’s good practice.

Once the kids master some dirty work around the house for you, they’ll be ready to level up to a sucky summer job for somebody else next year.

Why push your kid to take on crappy work? It builds character. And, it pays.

Want to turn these tips into action? Check out