99 – FamZoo Review

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Episode Overview:

Ken has always been a proponent of teaching your children financial literacy for adulthood. Ken would sit down with his children weekly to review their financial snapshots. Ken was limited however since the children couldn’t access their accounts autonomously. Enter FamZoo, a paid software program that enables children to manage their own financial accounts and optionally have debit cards – with parental oversight. Ken reviews this program for those looking to teach their children financial responsibility.

Transcriptions are auto-generated, please excuse grammar/spelling!

Happy day to you. This is Ken Kaufman, and I am thrilled you’re here for Episode Number 99, a Review of FamZoo, which is this really cool app for working with your kids and teaching them about money. Before I get into that, I just need to acknowledge this is the 99th episode. When I started doing this podcast almost two years ago, and I’ve been doing an episode and launching it every Monday since I started, I think it was right about March two years ago, I had no idea that I would make it to 99. And I’m definitely gonna make it to 100 episodes. To get into the triple digits was something I didn’t even think…it just wasn’t even on my radar screen. I had some things to say, I started a podcast, and here I am a couple years later. It’s really, really amazing. And by the way, I do have an announcement in the 100th episode that you might be interested in, I’m gonna save that until next week. So, I wanna focus on this app software program and also prefunded debit card program that I decided to try out a couple of months ago.

It was right about, you know, the holiday season, Christmas time, New Year’s time, when I was looking around and honestly had been a little bit frustrated. Because for years, I’ve been using YNAB as my own budgeting app, my wife and I in our household budget, and then created a separate instance for…not a completely different account, but just a separate budget for each one of my kids. And it was great. It was really helpful. And my kids, once they turned 8, at Capital One 360, we were able to get them debit cards and a bank account, and get them rolling, and their bank account information flowed in automatically, it all worked decently well. But my biggest complaint was that I couldn’t give my kids access to their information in YNAB without giving them information to my wife’s information and everybody else’s in the household.

And so, they would always come to me, we’d have to do budget meetings once a week or once every other week. And they take snapshots of their budget, and so they’d have it on their phone, and they could just, you know, pull up that photo whenever they wanted to see what was happening with their budget, but it was static. And it wasn’t real time. And another complaint was when they would spend money on something that my wife asked them to buy that shouldn’t be their responsibility to pay for with their money, nobody would tell me about that, sometimes for days, or weeks, or months. And then sometimes the siblings would be buying things for each other. And they’d come in and say, “I think she owes me $2, and he owes me $10, and I owe her $17.” And it just turned into this web of a mess and took me forever to go in and do individual bank transfers, move everything around, get everything all situated so it’d all show correctly in YNAB.

Now, the one other element… So, those were my complaints with YNAB, but I just lived with them, didn’t see a way to solve those, or wasn’t motivated to, wasn’t that big of a pain. The other element that was getting problematic…well, maybe I shouldn’t say problematic. But the other part that was starting to feel like a constraint was as my kids were getting older…so I now have one that’s in college, home from a mission, I have one that’s on a mission, I have another that’s 16 and earning her own money. And as the kids get older, having them access the YNAB, and sitting with me and doing it, those things were just…it was just getting more and more cumbersome.

So, I started looking around, and I came across FamZoo, which I’ve looked at it before in the past. And FamZoo is basically two things, if I were to whittle it down. The first thing is it is a software program that you pay for. And it allows you to keep track of money for your kids. And the really cool thing is you get to set up an account for each of your kids, and they can have an app on their phone or pull it up on the internet if they have a Chromebook or whatever tool they use to access information online. And they can see their account, and as the account owner, I and my wife, the two of us are able to log in, and we can see everybody’s account, and they can see what’s been spent. And as I dug further in I thought, “You know, I really wanna give this software a try.”

Now, the other part besides the software, and again, I was hoping to solve some of the pains I was feeling with the way I’d been doing it before, which I was pretty committed to, and it worked okay. Not perfect, but it was a little clunky, but it worked. The other part of what FamZoo is is it’s also prepaid or prefunded debit card program. So, you can use just the software and basically use artificial money, show that money’s in accounts, and move it around, and all those different things, but at the end of the day, it comes out of your bank account. When you order the debit cards, what that allows you to do is fund those debit cards with allowances and all those sorts of things. And then your kids have a way to go and spend money using their debit card. It also has a bank account that’s linked to it, so they can have their paychecks direct deposited. And I’ll get into a couple of the details on that because it’s not perfectly clear, it’s not like having a bank account at your credit union or at a bank. But it’s pretty close. And the app, I think, makes up for some of the deficiencies in these prepaid or prefunded debit cards.

So, here’s how it works. And I just wanna give you some mechanics here. And I started there trying to give sort of a high-level overview of what this is and what it does. When you go in, you sign up for the software, and it’s relatively inexpensive. Now, I can’t remember as I’m sitting here, but I think it cost me $45 to use the software for the next 2 or 3 years. Fifty dollars, something like that, it’s pretty darn affordable. And then if you choose to use the prefunded debit cards, they give you a certain amount of them at no cost, and then every additional one is just $2. And so I think it’s four or five that you get at no cost or some number like that. So, pretty reasonable.

I signed up for the software, and started to get in and play with the system. And this is the one thing I’ll tell you, there is a heavy learning curve here, you’ve got to invest some time. The owner of the company, he’s very active in the Facebook page, in the customer support. And he’s doing a lot with this software. And you can tell they’re not a big company, I think I’ve seen where he actually calls people if they’re having challenges or problems and sends emails, and I think the support is fantastic. Lots of attention, very small company. And so, that part, it seems like you can overcome it, but there’s a lot…there’s a heavy lift to learn and understand what is the software.

And when I did this, I said, “I wanna go all the way with the debit cards,” because I’ve been frustrated with Capital One 360, their customer service has gone down, it’s hard to make transfers, their app works half the time and fails, like, most of the time, the other half of the time or whatever the percentage is. And as I jumped in, I said, “I wanna go for that part, too, and see if this could actually…these prefunded or or prepaid debit cards could actually replace the need for a bank.” So, I ordered. And let me pause at this point now to just make something really clear. One of the main things that my…or I should say there’s two things that my wife and I focus on with our kids in terms of money and the money that they get from us or from other sources. Number one is we pay them a stipend every week, it’s a small amount, it’s mostly I want them to learn…you know, get money and learn how to use it. And they’re not gonna get rich off of this stipend by any stretch.

In fact, I think the way we’ve calculated is it’s 30 cents per week, per year old you are. So, again, for a 16 or 17-year-old, it’s maybe, like, $4 or $5 a week, something like that. So, it’s nothing crazier, or obviously they’re gonna get rich off of you. But we’ve done this because we wanna give them experience with money, and learn how it works, and see how sometimes you make bad purchases. A year or two ago, my daughter signed up for a service that was for free, put her credit card information, and didn’t realize that they would start charging in 30 days. And then she got charged for something like $50 for a month’s subscription to this music software that she had signed up for online. Those are just really valuable learning lessons. I could have shared that story with them 50 times and she would never remember it and carry it with her in her decision making process on how to transact with money online and all that stuff.

So anyway, that’s a another story probably for another podcast, but we specifically give them that stipend, and it’s connected to the homeschooling program that we run. And because we don’t we pay allowances for tours because we believe in the saying that service is the price you pay for the space you occupy. And maybe if they wanna do some extra things, we’ll pay them a little extra for extra jobs. But that’s our opinion, and that’s how we’ve set it up. No judgment, no shame, nothing, however you wanna do it, you do it your way. The second thing that we’ve done as we’ve told our kids…because, you know, sometimes parents will say you need to save 50% of your money, or parents start to put some stipulations around, “Hey, if I’m paying you this money, you need to do these things with it.”

And so, what we’ve done is we’ve created a 5, 10, 15 plan, and we really encourage our kids to follow it. And it basically says, out of every dollar you earn, we ask that you put 5% aside for some type of giving to help somebody. Ten percent away to God, because we believe in tithing, and we practice that faithfully. And 15% into savings or to pay yourself. And that is a great…it’s worked out great for us. And I like the things that I see my kids thinking about and processing in their minds, and how they handle that, and they’ve adapted to it well. Again, whatever you’re doing there, no judgment cast towards you, you guys, do your program the way your family does. This is just the one that we picked. And we feel strongly about it, and our kids have enjoyed it, and they love seeing that savings number go up.

So, a couple of issues that we had, though, when they would get their allowance because I’d had it coming from my account, bank account, over into their account, that money would transfer over. And then they’d have to go into YNAB, and do all the math, and calculate, and say, “Okay, 5%, I put that into the giving, 10% I put that into the tithing, and 15% I pay myself or put it into savings.” The really cool thing about the FamZoo software is you’ll set up that weekly or monthly allowance, and you can have it deferred automatically into those different accounts. So, now the kids don’t have to necessarily do the math, but they can look and see the transaction happening every single week, and it’s automatically going into those three buckets. That part has been great with the software.

Another thing that we hadn’t been doing before, and it was a little discouraging to my kids, you know, one of them has gotten their savings really impressively up to just over $1,000. And they’re earning, I don’t know what it was, 2% a month in interest, and 2 cents, or 5 cents a month, or 10 cents a month, I can’t remember the number exactly. And that, I don’t know, that’s more negative, it’s like a negative incentive to save because that’s so low. And so, what you’re able to do in the software is set it up so that it automatically will pay interest. So, what happens is my kids get their stipend on Friday mornings, and it automatically defers into those three buckets. Actually, the four buckets because it goes to giving, it goes to tithing, it goes to savings, and then the rest goes into their spending account so that they can use that for whatever they’d like to.

And then on Monday mornings…and by the way, we set it up so they can get an email or text or both every time transactions happen with their card. And then the other thing that we’ve done is put a pretty hefty interest rate relative to what the market’s paying. I’m not saying we’re making anybody rich, again, off of the interest. But for what they’re keeping in savings, we are…every Monday, they get to see a little bit of money added to that. And it’s not 1 cent, it’s depending on the balance, it could be 50 cents, it could be $1, it could be $1.50. That starts to make a difference in them understanding the value of saving and putting money away, and possibly investing in the future.

So, these are some of the features that I’ve absolutely loved about FamZoo. Once you get in and get over that initial learning curve, again, there’s a price to pay there, it really runs smoothly. And my kids love it, they can look their stuff up any time rather than having to come through me or look at a snapshot from two weeks ago, where they can’t remember what they’ve done, or what money they’ve spent, or, you know, what they really have. And so, then they’re looking up their their checking account app to see what’s in that and those things. Super clean and easy. They have a debit card, they can use it anywhere. There are ATM machines where you can take cash out. Getting the money in is a little bit tricky. Again, there’s a heavy lift to get your bank, wherever your banking, set up so that the money will go over into your main account. The main account, for us, we just called it Kaufmann Bank, and it’s literally connected to my debit card, the money all goes in there. And that is the account that then funds into the kids accounts, the stipends, and so on and so forth.

One other thing, when the kids buy something that either my wife or I should have paid for but they’re doing it just out of convenience because my 16- year-old daughter was at the store and my wife needed her to pick something up for the family, in those situations now, as soon as that charge comes through, they can open their app, and there’s a buttons next that you can look at the transaction, click a button that says Reimburse. And then I immediately get a text and an email that says, “Hey, your daughter or so and so is asking for reimbursement for this item.” And then you just hit one button, approve, and they get reimbursed out of your account at FamZoo. Anyway, I could go on with features and all those sorts of things. What I would say is if you want to teach your kids about money, and you’re okay to put a little bit of time and investment upfront to really learn the program and learn how it works, this is a powerful tool. And it can really help you drive home your philosophies that you wanna teach your kids about and what principles you follow when it comes to managing your finances.

Really powerful tool. I’m really glad that I signed up for it, my kids are really enjoying it. It gives me tons of flexibility. Actually, my 5-year-old has a debit card, you can’t go get that from a bank, has a debit card that he can use all the way up through. Now, there’s laws around what age kids can do that and so on and so forth. So, it’s technically in my name, but I can give it to him and let him use it. Anyway, they’ve got a really cool way to set it up so that it makes sense and, you know, it follows all of the banking laws and everything. But I would recommend if you’ve got kids, you wanna teach them about money, take a look at FamZoo. I’ve enjoyed it. I thought I’d always have my kids on YNAB, and my kids were actually shocked when I said, “Hey, we’re gonna move your stuff over to FamZoo. Mom and I are still over here on YNAB, but I think this might be an easier way.” They were shocked that we were moving them, and they all love it now. Got great reviews from them, and they’re very happy with it.

So, take a look at FamZoo. It’s just famzoo.com, F-A-M-Z-O-O. Like I said, small company, great customer service, fun Facebook page that parents are on that you can ask questions, and share ideas, and principles, and philosophies, and, anyways, it’s been a great experience. So, that is gonna wrap up this episode. But again, I want you to listen in to the next episode, got an announcement that I will make. It’s the 100th episode. Again, can’t believe that we’ve gotten ourselves here. Many, many thanks to you for joining today. This is a wrap for Episode 99. And next time we’re together, it’ll be Episode 100. Happy day.

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Join Chief Financial Officer Ken Kaufman as he helps you track and hack your net worth. For those seeking financial independence, your net worth is one of the most significant measurements of success. Using his two decades of financial experience, Ken Kaufman helps you overcome your financial obstacles and look onward towards a better, brighter financial future.

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