I Love FamZoo’s PrePaid Cards for My Teens

 Hi, everyone.  This is Lara Hammock from the Marble Jar channel and in today’s video, I’ll tell you about the tool that I use for allowance and money management for my teenagers — FamZoo prepaid cards.  

I'm a big believer in giving your kids an allowance.  Not as a reward for good behavior or even for getting their chores done, but apart from that as a way to promote early money management and financial responsibility.  When my kids were younger, I used a whole host of different tools to pay them an allowance, from actual cash, to an allowance ledger, to ultimately the iAllowance app.  You can watch the series I did on kids allowance featuring iAllowance, if you are interested.

As my kids got older and became more independent, they needed to be able to access their money more easily.  For a while, we were on a cash-based system where I took money out in $5 increments and would allow them to “withdraw” cash from their iAllowance accounts.  But, I got tired of being a human ATM and they got tired of having to ask me constantly.  SO, we moved to this new system and I absolutely love it.

So, first of all, what is the FamZoo service and why is it different than what I was using.  I had been using iAllowance, which is just an online ledger that you can share with your kids on a phone app.  It keeps track of payments and withdrawals, but the actual money stays with me.  If they need to withdraw money, you can record that in the app, but I have to physically hand over the money.  Basically, I'm the bank, so I'm involved in every transaction.  

FamZoo has two different types of accounts.  The IOU accounts are just like what I WAS using -- it's essentially a ledger tool where I still keep and dispense all of the money.  What WE use and love are FamZoo's Prepaid Card Accounts.  With these accounts, FamZoo becomes the bank, and you use Prepaid Cards to divide up the money so your kids can access it.  You transfer money from your bank account to FamZoo's actual bank -- I think they use the First National Bank of Central Texas -- and then you order prepaid cards for each of your kids to access your account.  You can then load each card with money, which your kids use for spending anywhere that accepts debit cards.

This video is not meant to be a tutorial.  It is an accounting of my reasons for using FamZoo's Prepaid cards and why it works so well for us.  First, let's talk about all of the

Advantages

• Multiple kids, multiple cards - So the way that FamZoo works briefly — is that you set up a main parent card.  That way, when you transfer money from your bank, it ends up on your parent card.  Then, you set up your kids -- I have 2.  And set up cards for each kid.  I have two prepaid cards set up for each kid.  My daughter has card for spending and one for savings.  She carries the spending card around with her and keeps the saving card at home.  My son, who never has any savings, has a card for spending and a card for gasoline purchases, which we generally fund.  Once the money hits my parent card, I can disburse it to any card I want using FamZoo’s website or phone app. 
• Debit Cards - Once I transfer the money, my kids can use their card just like you would a debit card.  They have a separate PIN to use for each card, but it's extremely easy to use.  That way, I'm no longer dispensing cash and they can even use their cards for online purchases.
• Cash Back - I was initially worried about how they were going to access cash.  The free ATM's for FamZoo cards are pretty sparse in our area.  But in fact, it's super simple.  They can just get cash back on a debit card purchase, which they can usually do without any fees.  
• No Overdrafts - Here's the most important reason why I love this service.  You cannot overdraw.  So, many of my friends just give their kids a debit card for his or her bank account.  Same basic concept, right?  Yeah, except my son would overdraw daily and wrack up crazy fees.  He's just not ready for that level of responsibility.  Plus, there are usually fees unless you maintain a minimum balance, which I'm sure we wouldn't be able to do.  FamZoo has a monthly fee, which I will discuss later, but it is minimal and totally worth it in my book just to avoid getting hit with unexpected overdraft and minimum balance fees.
• Limited Access - the other reason I don't want to give my kids access to an actual bank account quite yet is they have some money in savings, but I don't want them to be able to access that for spending quite yet.  This way, they don’t have immediate access to everything in their name at our bank. 
• No Debt - Thankful, this isn't a credit card, so there is no way to rack up debt.  Once the money on the card runs out, it's gone!
• Safer than Cash - If your kid is carrying around a bunch of cash, if she loses her wallet, it's gone!  With a FamZoo card, you can lock it as soon as you know it's missing or transfer all of the money off of it.  
• Great App - The way I can give money and take it away from my kid's cards is through the FamZoo app, which is great.  *I* have access to the whole account, but my kids can only see their own cards.  They can check their balances easily to determine whether they have enough for a purchase.  I can transfer money super easily and the money is available to them instantly.  So, literally my son will be standing in line at the grocery store, call me to transfer money for the purchase, and the funds will be ready when he swipes his card for check out.
• Automatic Payments - My kids get an allowance of half their age per week, which I pay out on Fridays.  I hate having to remember this, so I'm thrilled that FamZoo has a feature that allows me to set this up to happen automatically.  You can also set it up so that the payment is split between cards.  For example, if you want 60% to go to the spending card and 40% to go to the savings card. 
• Transfers - My bank connects directly to FamZoo's account, so I can do transfers from within my banking app for free.  Once the money hits my card in FamZoo, I can transfer as many times as I want for free.  I take full advantage of this -- doing sometimes as many as 10 transfers a day.  With a regular bank account, there is usually a limit on transfers before they start charging — and it’s low, like 6 per month!
• Purchases register quickly - purchases on these prepaid cards register almost immediately, so the card balance is always up to date.  It's also not a bad way to see what your kids are up to.  My son leaves a bread crumb trail of small junk food purchases whereever he goes.
• Reimbursement - This is a feature I love.  Say my daughter needs a new swimsuit.  *We* buys her needs, she uses her money for her wants.  This purchase falls into the needs category, so I'm happy to pay for it.  She has enough money to cover it, but after the purchase, she can ask for a reimbursement from right within the app.  I get an email and a text asking for reimbursement with a convenient link back to the app.  Then I just have to approve it and the money transfers back to her automatically.  
• Extra cards - Once you get your account set up with your initial cards, you can always add new cards for just a one time fee of $2 per card.  There is no extra maintenance fee.  

So, those are all of many advantages of FamZoo’s PrePaid cards.  Let's talk quickly about the disadvantages:

Disadvantages

• Fee - FamZoo is not a free service.  It's an actual bank account with nice bells and whistles, so you are paying to bank your money and get access to it in such a fancy way.  You can pay as much as $6 per month, but I paid in advance for 2 years and it worked out to just $2.50 per month.  This is a total bargain for me who would inevitably be paying through the nose in bank fees under any other system.
• Transfer Delay - it takes at least a business day for me to transfer money from my checking account to FamZoo.  Mostly this isn't an issue, but sometimes, if I don't realize I'm running low and do it on a Friday, it can feel like a long time before hitting my FamZoo account the next Monday or Tuesday.  In this case, I borrow from my child who saves more money and pay her back as soon as the money hits, but it would be nice if it happened a little faster.
• Goofy cards - The card design is a little childish.  It's not that bad (my kids have never complained about this), but they don't look like an actual bank card with the big FamZoo logo on them.  Fortunately, they got enough negative feedback from embarrassed teens that they've created a more minimalist design that doesn't scream MY PARENTS GOT ME THIS KNOCK OFF BABY CARD!

And that is it.  I LOVE this system and plan to use it through college for my kids.  After that, fingers crossed, they will be making their own money and will be on their own to deal with real banks with real fees.  Until then, it's a perfect system to take the next tiny step towards financial independence.

Let me know what you think!  Comments are always appreciated and thanks for watching!