Handing out cash to kids and calling it “allowance” is the modern day equivalent of contacting a friend via snail mail.
These days, allowance apps and Web sites are dominating the allowance field — and it’s teaching kids about credit, interest and banking, says Bill Dwight, a Palo Alto-based software developer and former Oracle Corporation executive who founded the online family banking website famzoo.com in 2006.
“I simulated the things that they’d encounter in the real world,” said Dwight, who has five children. “To a kid, if you take their birthday check to the bank, they’ll earn two pennies after a year and they won’t have any interaction. But as a parent on the site, you can set the savings rate and they can earn a couple pennies every week.”
The kids get a text every week and they get positive reinforcement that their money is earning money, so they usually want to save rather than spend.
His system also allows parents to bill their children for items like cell phone usage — and it lets them tag on interest if they can’t pay their bills that month.
“It’s just an example of what you can do to help kids at a very young age learn about using plastic,” Dwight said.
There’s an abundance of technology available today to help with allowance:
Allowance Manager
This web and mobile app allows families to set a weekly allowance for kids. They can add or remove money and can notify their kids through email or text. Parents can set up bank accounts and use real money — or they can use the app to track allowance online, and then do the payouts in person.
Cost: Free if you don’t do online banking. $98 per child annually if you bank, or 50 percent off for readers with the code 2LearnEarly.
Get it here: http://www.allowancemanager.com
Virtual Piggy
This site functions like a baby bank account. It provides parents with a place to organize their child’s allowance — but it also gives teens (the site is geared toward older children) a place to spend. Families can also view their child’s spending (it’s impossible to spend more than their prepaid “Oink Card,” which is also accepted anywhere that Discover cards are accepted).
Cost: Free
Get it here: http://www.oink.com
iAllowance
After you set up your child’s weekly recurring allowance, you can use this app to let your child keep track of his chores and his money. You can also set up rewards such as ice cream, TV time or money for chores or tasks completed. Parents can set up an unlimited number of bank accounts per child so they can learn about savings, checking and spending accounts.
Cost: Free
Get it here: http://www.jumpgapsoftware.com
ThreeJars.com
Kids learn about saving, spending and sharing (hence the company’s name). Kids can put a portion of each dollar earned into their virtual savings jar; or they can use their earned cash if their parents approve; or they can give to charity. ThreeJars also lets kids request odd jobs from their parents so they can earn more money.
Cost: Free
Get it here: http://www.threejars.com
