Teens, tech, and money: Gaining control of those mystery charges
December 8, 2018
Once upon a time, when they were still bitties, my boys spent $250 on Smurf berries. They had no idea they were spending real money — and neither did we until our credit card statement showed up.
Apparently, we were far from the only ones, as other horror stories about teens, tech, and money illustrate. The problem was big enough that Apple agreed to refund $32.5 million in purchases in a settlement with the FTC.
While we haven’t had another big surprise like that, we’re still constantly plagued by mystery charges and decided we needed to get a handle on it.
Our teens, tech, and money fiasco all started so innocently…
Or lazily…I’ll admit to it. It’s largely my fault. With three kids constantly asking me to enter a password (this was pre-fingerprint days) so they could spend $.99 here and another $.99 here, then sending them off to scrounge under their beds for change to pay me back…it got old really, really fast. And minimum age requirements made it tough to set them up with their own accounts without mommy demonstrating that it’s OK to lie about your age — something I could easily see coming back to bite me a few years down the road.
So…I managed their minor financial transactions haphazardly, and the predictable messiness ensued.
The next evolution: a cashless family system
As our kids became teens and tweens, we put the burden on them. They were responsible for creating a virtual ledger for their finances: adding their allowance as well as any other “deposits,” tracking their expenditures, and being honest enough to tell us when they were out of money.
And, for the most part, they did pretty well. But then they wanted to borrow against the next month’s allowance, and, while I think their intentions were good, things got out of hand quickly.
Two other factors complicated things even more: subscriptions and the difficulty of finding out what a particular charge was for.
- They would purchase a subscription to their newest favorite game, but when they lost interest, they’d forget to cancel the subscription — and to write it down as an expenditure each month.
- While Apple transaction records are fairly detailed, it takes some digging to determine the exact nature of Microsoft purchases, especially if you run them through PayPal. We had statements where there was more money than I’m willing to admit in online expenditures — each for only a few dollars (but they added up!) — and we couldn’t figure out what was what. For all we know, some of the charges are fraudulent, but we have no way to tell.
So, when we finally started doing our primitive form of forensic accounting, it was extremely difficult. Since all purchases came out of the same few accounts and were paid by the same few cards, there was no way to determine which child bought what.
That meant game over for the “hands-off” approach. We needed another way to handle our kids’ purchases that:
- Didn’t require us to enter a password every time a child wanted to buy something
- Tracked how much money each child had, incorporating both deposits and expenses
- Made it clear who bought what and how much it cost (and deducted that amount from their virtual “account”)
- Allowed us to “shut off the spigot” by removing our credit cards from the kids’ spending options
After a lot of research, we decided to go with FamZoo (full disclosure: affiliate link). I can’t review it yet because we’re just now setting it up, but it offers all the “must haves” plus a lot more:
- There’s an actual MasterCard-branded card for me and one for each child. I fund my card from my bank account, then fund the kids’ cards from my own.
- I can automate their allowances (and even divide it among defined spending categories).
- I can see every transaction.
- They can use their cards both online and for brick-and-mortar purchases (and even at ATMs), just like a real debit card.
- It lets you set up a list of “chores to be done” with a corresponding payment for each. I really like this because the kids are always asking me if there’s anything they can do to earn money. This way, all they have to do is pick something from the list, and once I approve the job as complete, the money is transferred automatically.
- On the flip side of things, you can move money back t0 your own card for things like bad grades, missed curfews, etc. We pay for good grades — I know that’s controversial, but it reflects the way the real world operates — and I’ve often toyed with the idea of docking them for bad grades.
- They can borrow from each other and from me — and even charge interest!
- You can pay interest to encourage your kids to save.
As I said, I can’t recommend FamZoo personally yet (I’ll write a review in a few months) as I’m just now setting things up. I did check out some other reviews, and most were very favorable. The biggest complaint was that the mobile app was clunky and hard to use, so you have to do most things through the website. That’s not a big deal to me, but I know it might be to some.
I didn’t really intend for this to be a promo for FamZoo. We were at our wits end on how to control all of the random charges that kept showing up on our statements, and, after exploring other options, this is the one we liked best. We’ll see how it works.
What I really want to know is whether other families have this problem and, if so, how you handle it. I don’t usually beg for comments, but I will this time: Pretty, pretty please tell me what works for your family. Depending on the results, I may write a compilation post. And I’ll definitely write a review on FamZoo when after I’ve used it for a while.