One of the biggest surprises for me when we first started giving our kids allowances was the number of times we would forget to give them their money.
A few weeks would skip by and then suddenly we’d remember that it was Allowance Day. Often, a painful retracing of weeks followed as we tried to figure out just how much “back-allowance” we owed them.
Of course, we’re not the only parents who’ve faced this annoying dilemma. Luckily, there are some enterprising moms and dads out there who have cried out “There has got to be a better way!” and they’ve created online allowance tracking sites.
I love this idea. It’s like a virtual bank for kids and, done the right way, kids get experience in managing their own money in just the way they’ll be managing their money as adults – checking balances, moving money between accounts, budgeting, calculating how much they need to save, playing with different scenarios based on spending & saving, etc.
The one thing to watch out for is that no real money is deposited with these sites. So, as a parent, you have to be prepared for when the kids suddenly request the amount in their accounts. You’re the banker so you’d better be prepared for a run on the bank!
I spent an afternoon recently signing up for FamZoo, Moneytrail, Zefty, ThreeJars and FamilyMint to compare products. Over the next few posts, I’ll share with you what I like about each one and what was missing for our family. [Update: the winner for us was FamZoo. You can read the review here.]
To evaluate them, I came up with my own criteria for what is important to our family. Depending on your allowance system, you may value different options. If you figure these out in advance, you’ll be able to see which one works best for you and your family.
What We Wanted
Make life easier for parents:
- Automatic allocation of the allowance to each child on a weekly basis
- Automatic allocation of interest to each child on the last day of each month
- Mobile access so we can check account balances when out with the kids
Give the kids control of their money:
- Ability for each child to sign in and check on their money without the help of a parent
Help the children learn about the consequences of their spending decisions:
- Ability for each child to see where their money has gone and realize the consequences of their spending decisions
- Ability for each child to set a savings goal and track their progress towards it
And just because I like to be demanding:
- Not locked into Spending-Savings-Charity approach
It turns out that all the sites I reviewed do the following three core benefits(call it the price of entry for offering an allowance tracking system):
- Automatic allocation of the allowance to each child
- Ability for each child to sign up and check on their money
- Ability to set a savings goal and track progress towards it
What else can they do? Lots of interesting and useful things which I’ll share over the next few posts.
In the meantime, which kids allowance online tracking or management system do you use? What do you like best about it? Am I missing any from my research?