Father of Five Keeps Family Finance on Track

Our next feature this week is written by Bill Dwight, Founder & Chief Dad of FamZoo.com. In 2002 Bill played an active role to help teach his daughter financial management. His ideas evolved throughout the decade from spreadsheet, to web, and ultimately to mobile app. Come along as he recounts his course…

When it comes to possessions, money, and responsibilities, kids have lots of questions:

Can I get some gum? Silly bandz? A WoW subscription? An iPad? Jeans?

Can I have an allowance? Joey gets one.

Why do I have to make my bed? What if I don’t?

And parents have lots of concerns:

I’m worried about all the “me, me, me” and “buy, buy, buy” messages constantly bombarding my kids.

I’m worried my kids don’t realize how expensive life really is.

I’m worried about the financial choices I see my kids making.

As the parents of 5 kids (now ages 9-20), my wife and I have heard all these questions and have had all these concerns — and then some!

I created FamZoo as a way to help families tackle these questions and concerns in a thoughtful, systematic way.

What’s FamZoo?

FamZoo is an online “virtual family bank” that helps parents teach their kids good personal finance habits. FamZoo fills the gap between a physical piggy bank and a real financial institution. Its accounts keep track of IOUs between the parent and the child. Parents hold on to  the real money until purchases are made. As far as kids are concerned, it’s their own personal online bank.

As parents, you’re the bank managers. You make the rules and customize the bank to reflect your family’s unique values. You can pick and choose from a variety of tools — allowances, chores, budgets, savings goals, loans, compound interest, etc. — to give your kids hands-on personal finance practice.

What’s The Right Way To Teach Kids About Money?

Read just a handful of expert advice articles on kids and moneyand you’ll quickly find there’s no consensus. Allowance is good. Allowance is bad. Pay for chores. Never pay for chores. Get a job. Focus on school. You get the picture. There are as many right answers as there are families. The most important thing isn’t whether you use allowance, paid chores, outside work, or some other specific tool to teach your kids about money; it’s how you apply those tools and how you communicate with your kids along the way. Take the advice that matches your family’s values and financial situation, leave the rest.

FamZoo gives you a flexible solution that matches your values, keeps you on track, and encourages regular communication and lots of practice.

The Evolution of FamZoo: From a Spreadsheet…

The “Dwight Family Bank” was established in 2002 when our eldest daughter was 11. It began as a humble spreadsheet with a single page to represent her “account” — additions for weekly allowance (when I remembered) and subtractions for her purchases. Her first purchase was a mini toy horse. Those were the days!

To a Personal Web App…

As I added more pages for the other kids, I soon tired of hearing: “Dad, how much money do I have now?” Plus, I kept forgetting to add regular allowance entries. I’d have to sift through old entries to see how many weeks I needed to catch up on before I could answer.

So, being a software nerd by trade, I killed a weekend building a very crude personal web app where the kids could log in for themselves to track their balances. My wife and I could sign in separately to make any adjustments. I also automated allowance delivery — no more rooting around to see if things were up to date.

To a Commercial Web App…

After a few years, I began to realize that this simple little web app was actually teaching my kids some very important financial skills, like saving patiently and spending wisely. It dawned on me that this was the spark of something that could be truly useful to families everywhere. I was also at a professional crossroads — eager to try my hand at starting my own venture before senility set in completely.

So, in 2006, I ditched the Silicon Valley executive suite, dusted off my coding skills, and launched FamZoo.com. After loads of development, a multi-year beta trial with 100 families, adding and refining more capability, convincing one old college roommate to join me in the coding, and convincing another to supply all the fabulous artwork, we finally launched FamZoo in January, 2010.

To Mobile Text Commands…

The web app is neat, but there are times when you really need to access FamZoo while you’re out and about. Maybe you’re fielding a purchase request at the check-out stand, staring at your teen’s unmade bed ready to dock him with a chore penalty, or trying to remember the family’s shopping list at Costco.

We needed FamZoo mobile, and we needed it on every kind of phone. FamZoo Quick Commands were born. Just send a cryptic text message to FamZoo and retrieve your balance, debit an account, or get your grocery list. OMG!

To a Mobile Web UI…

But not everybody digs cryptic text commands, YKWIM? It was time to create something friendlier. We already had lots of customers across AT&T, Verizon, and other networks, so we wanted FamZoo to work on both the iPhone and the Droid platforms right out of the gate. We decided to design a separate web UI optimized for the mobile browser. The FamZoo Mobile Web UI was born.

To a Mobile App.

“Where’s FamZoo? We searched all over the App Store!” Doh! If you don’t have an App, you don’t exist on the iPhone. The FamZoo App hit the store October 28, 2010. (NOTE: The FamZoo app is free to download, but the family must register at FamZoo.com ahead of time to use it.)

They’ve Got Questions. Now You’ve Got Answers.

So, the next time your kid asks:

Mom, can I get some gum?

The answer is simple:

Check FamZoo.

Do it on the web, with a text message, or from your app.

P.S. FamZoo’s secret ulterior motive is to introduce kids to philanthropy and turn it into a lifelong habit. Sshhhhh. Don’t tell anybody!