A prepaid card can help parents manage a teenager’s allowance. It can also help them monitor how and where their child is spending money. And the best cards can even help parents teach children how to manage money. We look at one potential option that does all three in this FamZoo review.
Several years ago I met the founder of FamZoo, Bill Dwight. We attend FinCon every year, a personal finance blogging conference. I’ve always been impressed when talking to Bill. He seems to have a genuine desire to help parents teach children responsible money habits. Let’s see how FamZoo can help accomplish this goal.
What is FamZoo
Most think of FamZoo as a prepaid debit card for teens and their families. While that’s true, it’s really more than that. FamZoo describes itself as a “virtual family bank.” The parent is the “banker” and the kids are the “customers.”
FamZoo gives parents the tools to manage their kids’ money. It does so through what it calls IOU accounts and through prepaid cards. These tools allow you to set the “rules” of your family bank, including–
- Automated allowances
- Rewards for chores
- Withholding for saving or giving
- Penalties for missed work
- Parent-paid interest on savings
- Expense sharing
- Matching contributions
How FamZoo Works
You can think of FamZoo as a combination of an app that manages what FamZoo calls IOU Accounts and a bank account (with prepaid cards if you choose). You can choose to just use the IOU Accounts through the app, just the prepaid cards, or both.
The FamZoo app enables you to set up virtual accounts for each of your children. Through these accounts, you can pay your child an allowance, give them spending money, encourage saving and giving, and even take money away if they fail to do their chores.
The IOU Accounts are not connected to a bank. Parents are the bank. If your child gets a $20 birthday gift, they give the money to you and you credit their IOU Account. If they want to buy something that costs $10, you pay for it however you wish (e.g., cash, credit card, check), and subtract it from their virtual account.
You can automate IOU Account transactions, such as a weekly allowance. If managing the cash yourself isn’t appealing, FamZoo offers prepaid debit cards.
FamZoo Prepaid Debit Card
Famzoo also offers prepaid debit cards. These cards are linked to an FDIC-insured bank account. Apparent sets up the primary funding card in his or her name. Both parents can have a prepaid card if they so choose. Then, each child gets his or her own prepaid debit card at the parent’s discretion.
For children under the age of 13, the card is in the parent’s name. For children 13 and older, the prepaid debit card is in their own name. In either case, the parents have complete control over all of the prepaid debit cards.
Related: The Best Prepaid Debit Cards
The parent funds his or her prepaid debit card. Once funded, they can transfer money at no cost between all of the family’s prepaid debit cards. Each family member can have one or multiple cards. For example, a pair of could set up separate cards for child spending, savings, and giving.
Parents have complete control of each debit card. When a parent logs into the FamZoo dashboard, for example, they can see all balances and transactions of each prepaid debit card. In contrast, when a child walks into his or her FamZoo account, the only see their own balances and transactions.
A FamZoo account costs $5.99 a month. That fee covers the entire family. If you prepay, the monthly cost goes down by as much as 58%.
|You Pay||Which Equals||Why Pre-Pay?|
for 6 months
$9.95 or 27%
for 12 months
$31.89 or 44%
for 24 months
$83.77 or 58%
There are some additional fees for certain transactions. For example, there are fees for ATM withdrawals at ATMs outside of FamZoo’s nationwide network. There are also fees for transactions occurring outside of the U.S. By and large, however, these fees are easy to avoid.
FamZoo offers a host of features to help parents and children manage money.
- Parent/Child Roles: Parents have complete control of all accounts, while children only see their accounts.
- Instant Transfers: Parents can move money between cards instantly and without fees.
- Scheduled Transfers: Parents can automate recurring transactions such as allowance.
- Activity Alerts: Both parents and children can receive card activity and balance alerts.
- Lock/Unlock Cards: Parents can turn cards off and on.
- Money Requests: Parents can automate and track requests for money.
- Reimbursements: Parents can automate and track reimbursement of family expenses.
- Payment Checklists: Parents can teach children the relationship between money and work. They can schedule chores and odd jobs and tie them to rewards or penalties.
- Spend, Save and Give Accounts: Parents can order additional cards for each child. Each card can be given a unique purpose, such as spending, giving and saving.
- Payment Splits: Parents can split payments between multiple accounts.
- Parent-Paid Interest: Parents can set up automatic interest to paid to their child’s account to encourage saving.
- Savings Goals: Children can set and track savings goals.
- Family Billing: Automatically charge a child’s account for their share of a family expense.
- Informal Loan Tracking: If you lend money to your child, track the loan and the progress of payments.
How do I sign up for a FamZoo Account?
You can signup for a FamZoo account online.
Is your money safe?
Yes. Accounts are FDIC insured and our deposited at Four Corners Community Bank.
Does FamZoo pay interest?
No. The FamZoo prepaid card does not pay interest. Parents can pay children interest from their own account to encourage savings.
How much does FamZoo cost?
FamZoo costs $5.99 per month for the entire family. If you pay for six, 12 or 24 months at a time, you receive a discount.