Review: How Moneytrail Tackles Allowances

Continuing our series of reviews looking at online allowance tracking sites or virtual family banks, today we’re looking at the new kid on the block.

Moneytrail was launched in 2010 by Pam and Frank Whitlock. As parents of four children, including two teenagers, they had experienced first hand the struggle to keep on top of allowances, loans and who had paid for what. Out of their frustration came the inspiration for Moneytrail, which is focused on providing money management for teens.

I should disclose up front that I have become Twitter buddies with Pam in recent months so I have a bias towards wanting to see her succeed. She’s doing an amazing job of marketing Moneytrail and inspiring parents to teach their teens money management skills. I really admire how she is venturing down new paths and we’ve also giggled together over the exploits of our children.

Moneytrail is free. As is clearly laid out in the explanation pages on the site, Moneytrail makes its money from The Moneytrail Market. This allows teens to create wishlists on Amazon of items they wish to purchase. Once they have enough to buy what they want, you click through to Amazon and buy it there. Moneytrail gets a commission from each purchase. There is no mark up – you pay the normal price on Amazon.

As with other sites, kids can have their own username and password to log on and check their accounts. It’s easy to set this up. You can:

  • Choose whether you want to have the Spend-Save-Share approach or just a basic allowance approach (which is what I set up). Alternatively, if you don’t pay an allowance but want to keep track of your child’s money (e.g. money earned by working, cash gifts from Grandma, gift cards from aunts and uncles), you can set up a “No Allowance” plan.
  • Name your bank – we called ours The Bank of My Parents but I’m sure you could be much more imaginative!
  • Set up how much allowance is paid and have it paid automatically weekly (you choose the day) or monthly (you choose the date).

Moneytrail tries to plan for every eventuality in how kids and parents might be handling money together. And it’s here that I start to struggle with the site because it becomes a little too complicated for me. Here’s the summary for the set up I used for T:

The Credit account tracks what Moneytrail calls the IOUs between parents and kids. This is where the allowance is automatically entered and you can also make withdrawals (for when your child asks for money from their allowance) and deposits (for when they earn money from you). No cash is actually exchanged (as with all online allowance trackers or virtual family banks) until the child requests money. The parent then pays the money and adjusts the balance accordingly.

The Cash account tracks the actual cash that a child has in real life, for example in a piggybank in their bedroom. The Check Balance is where you track any uncashed checks and the Gift Card balance is where you track unused gift cards.

For me, this feels unnecessarily complicated and extra work. If the teen spends some of the cash they have in hand, they have to go into Moneytrail and update the Cash Balance. If the teen decides to cash a check, then there are a series of steps they take to move the amount from the Check Balance to the Cash Balance.

I can see what Moneytrail is trying to do with this:  account for all the money that a teen has. As Pam and Frank are parents of teenagers, they are likely dealing with more complicated situations than I do as a mom of 9 and 6 year olds. And, you don’t have to use all these features. You could set it up the way I have and ignore the other accounts until you need them.

Helping kids acquire the savings habit is another key feature for online allowance trackers and Moneytrail plans for this as well. You can add another account to your child’s options, name it as the item he or she is saving for, e.g. Nintendo DS and then track the savings in that. However, Moneytrail doesn’t have an option which tells kids how long until they will have reached their savings goal.

Moneytrail doesn’t have a mobile app but they have been smart and made sure that their site is optimized for the mobile web. You can access your account details and enter transactions on your iPhone, iPad, Android, Blackberry or Nintendo DSi.

The website design is very clean and simple. No whizzing graphics, just the line items. There are also handy hints placed all over the site which you can click on for explanations of how to make something happen.

Ultimately, Moneytrail does not meet our checklist of criteria and I found the options too confusing. It felt like Moneytrail would add work to my life rather than simplifying it.  It may be, though, that I’m not the target market for this as I’m not the mother of teens.

This is part of a series of reviews about online allowance trackers and virtual family banks. You can also check out reviews of FamZooZeftyThreeJars and FamilyMint. Here’s what started the search and the guidelines I’m following.

What is it like teaching a teen to manage money? Only a few more years before we’re in the thick of it, so I’d love to hear your experiences.

6 Responses to Review: How Moneytrail Tackles Allowances

  1. Susan says:

    I am enjoying your series, and like the level of attention you are giving to this issue. I am a current user of Moneytrail, with two kids in the teen range. I can 100% tell you that as your children age, all of the options available will be helpful! Both LOVE the Amazon link and market options – and it is a great help for relatives for the holidays. Also at this age, birthday party gifts are now most often gift cards, and we use that option quite a bit. An unwanted gift card can be given to me and recycled as another gift or I can use it if it is a store I enjoy, and their account is credited in an exchange. My kids like to see the clear trade, and appreciate the accountability. The cash item is also something you will use later as your kids get older and want to physically and literally have some money on hand, but are also saving. It has become good teaching tool; with a regular account check, I can casually mention that they had $40 in cash, is that current? and if not what happened to it? They realize where it went, what they spent it on (impulse buy or otherwise) and it is a great teacheable moment. One of my kids has already learned that if he has $$$ in his pocket, he will spend it. He is banking more to avoid temptation now. The other is already a good saver, but had so much in her purse from petsitting that we had to talk about safety and carrying around too much cash! Both conversations came after a Moneytrail balance check, and both required minimal effort to update their accounts. Right now both are saving for large purchases, and having all of the options available lets them see thier complete portfolio of funds, and makes them aware of thier total net worth, like mini-moguls. Since they are older, they can figure out themselves how much more they need for their goal – and honestly I hope they choose to work above and beyond their allowance to earn something special more quickly. That combo of options makes Moneytrail my choice for my teens. Wait a few years, and I think you’ll be back! : )

    • Suzanne says:

      Thanks Susan for the great insight on how you and your kids use Moneytrail. I love how you’ve been able to use it to start conversations with them that have helped them learn about different money issues, particularly understanding your spending personality. You’ve answered some questions for me.

  2. Suzanne,
    Thanks for taking a look at MoneyTrail and providing some great details and descriptions of many of our features. I, too, enjoy our twitter conversations and sharing stories about our kids!

    MoneyTrail does indeed have a lot of features that are designed for teens. As our children entered the teen years, we saw that their money management needs changed right along with them. They began moving beyond a basic allowance and needed a system for keeping track of income (from gift cards, checks, IOUs, etc.) and that could also keep track of expenses (cell phone payments to parents!). Teens also spend a lot of time away from their parents, so we wanted a system that teens could use independently. I recently wrote a blog article detailing how teens can use our system. You can find it at http://blog.moneytrail.net/2011/06/getting-teens-to-determine-their-net.html

    We also saw a great need for a cash management system. Our teens might start off the weekend with $20 in cash but by the end of the weekend, the cash would be down to $3 or $4. We all know that spending a dollar here or there really adds up over time and we wanted a system that could help teens be accountable for those little expenditures. By using MoneyTrail’s cash feature to keep track of where their money is going, impulse spending is reduced.

    Many of our MoneyTrail families also have younger children. They simply do exactly what you suggested. They only use the features that apply to their children; usually the credit account covers the needs of younger children. However, there are many families that have teens and younger children. With MoneyTrail, families can use the appropriate features for each child, regardless of age.

    Thanks, Suzanne! Looking forward to many more great conversations!
    Pam
    pam@moneytrail.net

  3. Suzanne,

    It’s been awhile since you reviewed MoneyTrail and we have had several changes that I wanted to update you about. First, we now have a MoneyTrail App that is available in all the major app stores (iTunes, Google Play, Amazon Android, Nook apps, BlackBerry Appworld). Readers can find a list of these links at: http://www.moneytrail.net/Home/InfoQuickGuideMobile

    Users can use any app to access their account. And…when they enter info from one device, the account syncs with all of their devices.

    MoneyTrail users can now create unique accounts within their MoneyTrail account to track savings for specific items. For example, my son created an account to help him save for an iPod touch and another of my son’s created a specific account to keep track of savings for a Disney trip.

    We have also added the ability for parents to add interest to their child’s account to encourage savings.

    We have also made the decision to remove the MoneyTrail market. However, the website is still completely free for all users and parents can add as many child accounts as they would like. There is a small, onetime fee to download the app from the various appstores.

    Thanks for the great series of reviews!
    Pam Whitlock
    Owner, MoneyTrail

    • Suzanne says:

      Hi Pam,

      Thanks for the update on Moneytrail. That’s great news about the apps and I love to see that Moneytrail continues to grow and build on its success to date.

      Suzanne

  4. Rebecca says:

    As the parent of a teen, MoneyTrail has solved our struggles with depositing/withdrawing actual money from his kid’s savings account (limit on transactions per month). Keeping track of everything is now a breeze.

    Pros – Free
    Easy to navigate
    Kids able to log in with their own account name and password to check their balances.
    Corresponding android app
    Ability to set up “Savings” and “Spending” accounts
    Easy to track purchases with notations
    Can set up auto-allowance “deposits”

    The only con I’ve found so far is that it appears kids are potentially able to change financial information and transactions on their own through their own account, without parental consent. I haven’t had a problem with it so far; but I can imagine an enterprising, or less than honest kid making adjustments or deleting transactions maybe without a parent noticing. There is no time stamp or log recording changes made or who made them. I’d prefer children not be able to make permanent changes without parental approval.

    I went on a comprehensive search to find the best free allowance program. I tried several and this one was definitely the best fit for us in terms of cost, features, and ease of use. Have been using it for 6 months now. Both my son and I appreciate the convenience and ease of keeping track of his allowance and spending with “The Bank of Mom.” Thanks, MoneyTrail!

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