First, if you don't care about the details, feel free to skip to the end for the solution. I was so excited to give my oldest son his first allowance. Since he was only 5 years old It was just a few coins, but I've been a finance nerd for most of my life and have been looking forward to starting my kids down this journey. BUT I immediately ran into a problem to solve: how do I teach about spending, saving, and tithe? With just one kid, this wasn't a big deal, but now I have 4 and after breaking out spreadsheets and having my wife get frustrated because of the lack of visibility, I knew I had to make something legit.
The evolution
Without going into too much detail let me outline the progression of our system starting from just 1 kid. Give allowance to kid. Boom, done. You get $0.50 for every year of age every week. Tithe was easy. Take that nickel and save it for Sunday. But how do I teach about savings? I know, give them interest every week! So the totals end up being - Save 30% - Tithe 10% - Spend 60% Now I need a notecard to calculate these things, plus when allowance hits I need to add 2% interest to their savings. Seems high right? We need it to be high or they won't care. Every week I have to run these calculations... and when we added kids this started to be an annoying chore! So we went to a spreadsheet to auto calculate things. Ok, that works.
Cash go bye bye
I loved buying my kids their own wallets. One had a picture of a train, another had a shark, and Lily's was all pink with flowers. But we ran into a few problems. They never knew where they were, and they could simply lose them. One of our kids lost over $40 by losing the wallet itself and he was crushed. We also started to have trouble getting enough cash and coins to distribute allowance each week. And then if we went somewhere and someone forgot their wallet... we had quite a few IOUs get lost in translation there. And finally, what if they spend money online??
Digital ledger
How about let's just keep their numbers digitally in a ledger of some sort and we won't have to deal with any of this? They can spend money anywhere, we'll just throw it on a debit card that we have, and then subtract their number from spending. So how do I get my wife to log on to Google Drive, access the Allowance spreadsheet, and update the numbers? Plus the kids don't really get to see what they're spending or how much they have. Ok, the last problem to solve, and it was not an easy solution. Time to actually make something legit. Luckily, I make software for a living :)
The Solution - Family ATM
I needed something simple, automatic, accessible, and easy for both parents and kids to use. For the parents, I needed a dashboard so they could quickly see everyone's totals, and some way to automate the allowance distribution each week (or monthly). For the kids, I wanted them to see their numbers as well and take ownership in making withdraws when they spend money, so they got used to seeing money in a bank account. But I sure didn't want to open up bank accounts for the kids yet. That's how the digital ATM came about! They could have a pin number and log in to make withdraws, deposits, see their history, and even wire money to their siblings. And yes, they get to use the old-school interactive ATM you see above. The best part? This system is now live, for anyone to use. A pretend bank, with real allowance.
Family ATM www.familyatm.com
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