Do you want to teach your kids to spend wisely, save patiently, give generously, and generally learn how to thrive in the real world on their own? Of course, you do. You’re a parent! Well, that’s precisely what Bill Dwight had in mind when he started building the FamZoo software for his own kids. When piggy banks and lectures alone just aren’t cutting it anymore, FamZoo steps in to help you teach your kids how to properly manage their own money. Your job is to supervise, direct and let them make their mistakes in a friendly environment. Here’s everything you need to know about FamZoo.
What is FamZoo?
In a nutshell, FamZoo is an online private family banking system, or a so-called “virtual family bank”, founded back in 2006 by Bill Dwight. Essentially, Bill’s idea was to build a software that allows busy parents like yourself to give their kids allowances and help them learn good money habits simultaneously – and with minimal hassle. Families love it because it isn’t merely a static tool but a hands-on financial education for children of all ages — preschool through college. In fact, the whole concept was designed around this educational component. Through a simulation of a real-world banking and financial environment, the system helps you teach your children how to earn, save, spend, and give money wisely and based on your own values.
The system enables parents to:
- set up allowances;
- set up chore lists;
- reward their kids for doing chores around the house or getting good grades;
- encourage savings and charitable giving through a form of payroll withholding;
- pay the interest on their savings;
- penalize them for not doing their chores or missing their work assignments;
- and much more.
How does the FamZoo Debit Card work?
With FamZoo, you are your kids’ virtual “banker”, and they are the “customers”. Each family member has their own account on their private family FamZoo account. However, a parent’s account is different than the kids’ accounts. As they log into their family FamZoo account, using the FamZoo website or mobile app, the first thing parents see is an overview page for their entire family. In other words, they can see information for everybody and thus track each of their kids’ account activities separately on this shared online dashboard. The children, on the other hand, can only see their own accounts. What all this means is that, as a parent, you are the one managing the real money and keeping track of their spending, only without having to be a human ATM for dispersing cash all the time.
Signing up for an account
There are two ways to do this – by setting up IOU accounts or opening FamZoo prepaid cards for your children. With IOU accounts, FamZoo tracks the balance of each child, and you pay them yourself. The prepaid card accounts are similar. However, they allow kids to actually spend the money that’s on their card, as well as to record where they have spent it. They pretty much work as your own debit card, but with one exception – you can see everything your kids are spending money on.
What you need to know about FamZoo prepaid cards is that they provide a safe payment mechanism for your children. There is no risk of debt, and they automatically capture all transactions. Upon signing up for the prepaid card account, you will need to decide how to actually fund prepaid cards. You can use MasterCard, American Express, Visa, or PayPal. You can also fund prepaid cards from the outside world. Each separate card has its routing and account number, which parents typically use to set up bank transfers or direct deposits.
When you order the cards, you will receive one primary, or “parent” card, which you can think of as the bank. The primary card is controlled by you. You will also receive additional cards of children, which are typically funded by the primary card. The first four cards are free. Also, each child can have several cards, the system which mimics the envelope method.
What are the ratings and reviews of the FamZoo app?
The FamZoo mobile app works with Apple and Android devices and is incredibly user-friendly. Online, it has excellent user ratings and has received more than 400 five-star reviews. Their mobile app rates 4.5 out of 5 on the Google Play Store. The best part about FamZoo? That would be the fact that parents can easily customize it to fit their family’s needs. For instance, they can start small and simply keep track of their kids’ allowances. The parents just love the convenience of being able to pay their kids allowances in seconds. This is especially handy if an emergency happens while they are away from home. Later, parents can ramp up to some of the advanced features such as paid chore lists or parent-paid interest.
Most parents appreciate the control the app gives them, but the user reviews mostly focus on the children’s incredible transformations in their money matters. People report many different times this had showcased, and one of the times is during relocation. Moving with children isn’t exactly easy-peasy. So, moving companies regularly talk about how important it is to properly prepare them for this step. One of the ways to prepare them is by involving them in the process, so the parents thought that a perfect opportunity to see their kids’ money skills at work. The kids took part in helping them develop a family moving budget. And, what is more, most did a great job!
Pros and Cons of FamZoo
Pros
Just like with any other prepaid debit card, with FamZoo, you can shop at stores and online, track your spending, set automatic payments, and receive notifications regarding the activity through a mobile app. This may not be everything you need to know about FamZoo benefits, but here are some of them:
- It is a great teaching tool. Children’s accounts can be divided into three different subaccounts: one for saving, one for spending and one for giving.
- Children of all ages can learn better money management. Still, the ones who will benefit the most from FamZoo are usually children and teenagers who earn an allowance or have a job. Still, some parents use it for their college-going kids. So, when the time comes for your child to pack and head off into the real world for the first time, they will need some assistance. That’s when you come in. While helping them pack, make sure they don’t forget their FamZoo card. They’ll need it.
- It is safer than cash. Carrying a FamZoo Debit Card is much safer than carrying around a wallet with a bunch of cash. If you lose your wallet, it’s gone. FamZoo card, on the other hand, you can lock it as soon as you know that it’s missing or transfer all of the money out of it.
- The benefits go on and on.
- Your initial 60 days are entirely free of charge. During that time frame, you can decide if the service is worth using or not. In the event you decide to cancel your subscription, you only need to make sure to do this at least 24 hours before the end of the free trial.
- It’s affordable. If you decide to renew your subscription, expect to pay a small monthly fee to use FamZoo. However, with everything FamZoo offers, the fee is minimal, especially if you don’t mind paying upfront. Plus, one fee covers the entire family.
- There are no overdrafts. With FamZoo, unlike with the regular debit card, you can avoid getting hit with overdrafts and minimum balance fees.
- There’s no debt. FamZoo Debit Cards are prepaid cards. So, there’s no way your kids can rack up debt. Once the money on the card runs out, it is gone.
Cons
One of the most important things you should be aware of regarding FamZoo virtual family bank is that, like other similar services, FamZoo is not free. It is an actual bank account and one with nice bells and whistles, for that matter. So, account users are required to pay a monthly fee for their subscriptions. Other pitfalls include:
- The number of features can be overwhelming at first. With FamZoo, you have so many options that, sometimes, figuring out what you should be doing with each account could actually present a bit of a struggle. Luckily, there are some pretty good guidelines on the FamZoo website.
- There are certain types of debit card purchases that you can’t prevent. Just like the “real” one, your kids will be able to use the debit card anywhere. However, if your kid is under 13, he will still need the parent to sign for their purchases.
- Options for divorced parents are somewhat limited. Divorced parents sometimes want more privacy. Thus, the full access to all funding methods in the app becomes less than ideal. However, you can get around this. For instance, you add one parent to the card and let the other parent send ACH transfers to the child’s card.
Costs of FamZoo
Once the trial period ends, FamZoo starts charging $5.99 per month for your entire family. However, if you do not mind paying upfront, you can achieve a lower monthly rate. For instance, by prepaying $59.99 for 24 months, your monthly fee will be just $2.50 per month. You can opt for one of the following pay-in-advance options:
- $25.99 for six months ($4.33 per month)
- $39.99 for 12 months ($3.33 per month)
- $59.99 for 24 months ($2.50 per month)
Once you choose your monthly plan, it will renew automatically. Still, if you decide to cancel your subscription, you can do this at any time without any further obligation. The pay-in-advance plans require a one-time, upfront payment. Therefore, these do not renew automatically. Instead, you can rely on FamZoo to notify you when your term is almost up. Then, you can manually renew your subscription with whichever plan you choose.
Are there Ads?
Ads: a perfect marketing tool but the bane of today’s user experience. Unfortunately, we weren’t able to find any information regarding whether or not there are any ads on the app. However, given that FamZoo experience is a paid experience, and, as we’ve said, the app has received more than 400 five-star reviews, it is our best guess that there aren’t any.
How’s the security?
If you pay a visit to the FamZoo website, you will find that “I forgot my (or my kid’s) password. Can you send it to me?” is one of the FAQs. Their short answer is: Nope! Their long answer explains how they store your passwords or any other personal information on their FamZoo servers. This essentially means that it’s a secure website, the priority of which is to protect any sensitive information you supply, so neither their own team nor any bad guys out there can read them. Plus, since real money isn’t at stake with IOU accounts, you can have peace of mind at all times. For the prepaid credit card accounts, however, the security is pretty tight. All your information is stored with the MasterCard Network certified credit card processor, TransCard, which utilizes the latest security protocols for its clients.
Alternatives to FamZoo
There are a couple of alternatives to FamZoo — Gohenry and Greenlight. Each was developed with the same specific goal in mind – to help parents teach their children better money management. However, each option has its own pros and cons, and which one you choose will depend on what you are looking for, specifically. If you need help deciding, it is best to examine each option separately. You can read both Gohenry and Greenlight’s full reviews on our website.
Finally, this article features everything you need to know about the FamZoo service. Their app is great for parents who would like to take a hands-on approach to educate their children about finances. But the thing that makes FamZoo so unique is the fact that it’s highly customizable. Each family that subscribes to FamZoo will be able to teach their kids about money, but they will do it according to their own values, believes, and principles. For this reason, however, the setup time to FamZoo may turn out to be a bit longer than with many other financial literacy apps. However, guidelines are relatively easy to understand, making it easier for you to wrap your head around everything else and enjoy the many benefits this app offers.
