American teens ranked below average in a global study assessing financial literacy among 15-year-olds. Conducted by the Organization for Economic Cooperation and Development, the U.S. placed ninth, being outranked by countries such as China, Australia and Poland.

But fear not – there is hope and help in America. The children of some 1,500 U.S. families who currently are members of FamZoo, a virtual family bank, may outshine their peers when it comes to financial savvy by the time they reach adulthood.

FamZoo is a private online family banking system where parents operate as the bankers and their children are their customers. The platform is designed to help parents teach their children to earn, save, spend and contribute money wisely through real-time, real life and real financial transactions.

“The whole idea was to allow parents to set up a banking system where they could make the rules themselves in such a way that they felt it would motivate their kids and create habits that would carry forward into adulthood – and also so that they could make mistakes in a safe environment under the tutelage of parents,” explained Bill Dwight, CEO and founder of FamZoo, Inc., a start-up company he launched in 2006.

As a father of five, Dwight realized that as his older children reached middle school, no one was teaching them the basics of finance. So he used their weekly allowance – a stream of income often taken for granted by kids – to help his children gain hands-on experience in making financial decisions. It was a raw system at the beginning. He tracked each child’s allowance and how they spent it using a spreadsheet, but that soon became tedious.

In the next iteration, Dwight, who had been designing software for over 20 years for Oracle and start-ups in Silicon Valley, decided to turn the spreadsheet into a website that represented online banking. His children could sign into it, and he and his wife managed it. “We controlled the accounts, and that created certain advantages. For example, if we wanted to encourage them to save, we could decide that we were going to pay our kids a weekly interest rate,” Dwight said.

As FamZoo operates today, parents can manage their children’s funds in IOU accounts or prepaid card accounts, or a combination of both. “They can set up automated allowances, rewards for chores and odd jobs, payroll withholding for saving or giving, penalties for missed work, parent-paid interest on savings, loans and much more,” explained Dwight.

Parents are charged a monthly flat fee which tops out at $5.99 per month if paying monthly, but if they opt for a plan where they prepay to cover a block of time in advance, discounts are applied. “A family could spend as much as one overdraft fee to get the system for two years,” said Dwight, in attesting to its value.

“We have predictable pricing with no ‘gotcha’ fees; it's a flat rate for the entire family. That's what FamZoo is all about – letting kids make mistakes in a safe environment – and we're not going to profit off of that. It's up to the parents and the kids to work together through those mistakes,” Dwight explained, adding that there is no charge for replacement costs for lost prepaid MasterCards, something that parents of teenagers can readily appreciate.

While FamZoo is still a small company, its growth is consistent each year as the concept catches on through word-of-mouth. Financial advisors and teachers also use this platform to work with families and students respectively, to promote financial literacy among youth. Financial advisors are able to create a co-branded version of the FamZoo platform.

“We believe we've built a banking system that is totally designed to encourage good habits for young kids, teenagers and young adults. Every email that I get from a parent saying, ‘Thank you so much for getting my relationship with my kids concerning money in order,’ is extraordinarily motivating to us,” said Dwight.

For more information about FamZoo, visit: http://www.famzoo.com/