As teens find opportunities to make money in their communities, Rock Your Block wants to make sure that they have the right tools and resources to track their earnings and spending, set money-saving goals, and learn the overall importance of money management. Parents play a vital role in instilling financial management values in their children, and our interview with Pam Whitlock, founder of Atlanta-based MoneyTrail highlights the importance of involving the entire family in money matters and how their application helps cater to the needs of today’s busy families.
What exactly is MoneyTrail?
MoneyTrail is a free, online allowance and money management system. Kids and teens keep track of their cash, allowance, IOUs and gift cards. We are a virtual family bank, which means that we do not handle your real money. We just help you keep track of the back and forth financial transactions that exist within families. For example, many families give an allowance to kids but lose track of when they last paid it. MoneyTrail keeps track of that automatically so parents and kids always know what the current allowance balance is. Another example would be if a teen does a job for a parent, such as babysitting or washing the car. If the parent doesn’t have the cash to pay the teen at the moment of service, they can enter an IOU into their MoneyTrail account so that the job payment isn’t forgotten. MoneyTrail users can also set up unique accounts to keep track of savings for specific items, such as a car, cell phone or school trip.
What inspired you to start MoneyTrail?
We have four kids, ages 8 – 18. Keeping up with the allowances and IOUs in our family was unorganized and was not modeling good financial management skills for the kids. I tried writing allowance dates on the calendar or making sticky notes for IOUs. Inevitably, the calendar or sticky note would get lost or I would forget to update it. Weeks would go by and I would have no idea how much money each child was supposed to have. Fortunately, Frank is a computer programmer and I am a former elementary school teacher. We were able to use our experiences and knowledge to create a solution. The solution became MoneyTrail.
At what age do you feel it is important to start talking about money with your kids?
As soon as they start asking you to buy them something in the store! Just keep it age appropriate. Use common everyday occurrences to initiate conversations. “You want a $15 football? What can you do to get $15?”
What’s the best approach? For different ages?
I think the two most important things for all ages are: (1) Have an ongoing, age appropriate dialogue with your child about money, and (2) Let your child have reasonable control over their money. They have to practice money management to become proficient at it.
Regarding specific ages, younger children need very direct experiences with money. For example, sweeping the porch might earn them one dollar. One dollar equals one toy at the dollar store. They can take the dollar bill to the store and hand it to the cashier at the checkout. They learn that once a dollar is spent, it is gone. As they get older, kids can learn to make plans for their money. They can save for items or charities and can even be introduced to the concept of “growing their money” by having the parents pay interest on their savings. By the time they enter their middle school to high school years, kids can begin budgeting for items or activities in their life, such as cell phones, weekend activities or clothing. The key is to enable and encourage kids and teens to be active and involved in their own financial life. They are capable of doing much more than asking Mom and Dad for extra money.
How did your parents teach you about financial management when you were younger?
I had a basic allowance when I was a kid. As I got older and needed (wanted) more money, I did the typical teenage odd jobs. I babysat, worked at a local restaurant and was the Saturday secretary for the real estate company where my dad worked. I don’t remember having long financial talks. I was just raised with the attitude that you have to work to get the things you want.
How has that changed for what youth need today?
In some ways, it hasn’t changed. Debt is still debt. Living beyond your means is still living beyond your means. Saving is still saving. However, I think it is easier for teens to spend money now because of online and cell phone shopping. They no longer need a car to go to the store. The prevalence of credit cards and the marketing to teens has increased dramatically since I was a teen. The combination of more credit opportunities and easier shopping can lead to dire financial situations if teens don’t understand basic money management techniques.
How does MoneyTrail help?
MoneyTrail enables kids and teens to keep track of their financial assets, so they always know how much money they have. They can also plan for big ticket items. Knowing what you have and planning for what you want will decrease impulse spending. If kids and teens can practice these skills when they are young and the consequences are minor, chances are they will make good financial decisions when they are on their own.