They want to give your child a debit card. What do you do?
Then, some basics. If you are seeking regular allowance distribution and management, most services can handle it. But if you’re paying your kids for chores and want to check tasks on a line-item basis before putting money on the child’s card, this is a feature you should especially opt for. Gohenry does this, and FamZoo helped pioneer it.
Also, what financial behaviors do you want to encourage – or change? Many parents like to reward savings with automatic interest rate increases or goal-based bonuses. “It allows parents to exaggerate the point to make the point,” said Tim Sheehan, co-founder of Greenlight. So check out that feature if it’s important to you. Greenlight offers this, and FamZoo has a strong offering as well.
Then, there is the goal of broadening financial literacy. Goalsetter founder Tanya Van Court has put resources into that side of her business. “A card is really an incomplete solution,” she said.
Goalsetter allows parents to pay extra for their children to do well on financial literacy quizzes and hold money back if they don’t complete them. She’s also trying to persuade credit bureaus to reward 18-year-old Goalsetter customers who are particularly well-informed.
“It’s not fair that some kids get added to their parents’ American Express accounts and develop a great credit score without spending a dime,” she said. (There’s already a system in place to allow younger users to start building good credit.)
Also consider the help you may need. “Everyone underestimates customer service,” said Mr. Dwight of FamZoo, which has a modest roster of 13,000 family customers. “When your teenage daughter is stuck at the gas station, you don’t want a bot.”
He would say something like this, given that he has a sort of home product, where he and his partner answer customer inquiries themselves. FamZoo earns bonus points for the granularity of the FAQs on its website, which makes my scared heart better for anticipating nearly every use (and abuse) case. Test out any start-up you’re considering by sending a message with a question to see what kind of response you get.
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