If you would like to get your children started on the right foot when they grow up, teaching them how to manage their finances while they are still young is smart.
For many people, keeping track of taxes, filling out the paperwork and determining how much money they owe or should get back is a daunting task.
Not many public schools teach taxes or how they work, so you must fill the gap.
Working with your children and showing them how each part of the process works will get them moving in the right direction in no time. They will then have one less thing about which they need to worry when they start a life of their own.
Giving your children an overview of the tax system and how it works is a good starting point when you want them to learn the basics. Some parents go into the little details because they want their children to learn as much as possible, but making that mistake can cause more harm than good.
You will quickly lose their interest and have trouble getting them to pay attention to your lesson. Explain that the police, fire department and other government agencies depend on taxes to operate. Let your children know they will need to set aside a portion of the money they earn to pay the government for the services it provides the citizens. Although nobody likes paying taxes, the nation would fall apart without them.
Get Them Involved When You File Your Taxes
Getting your children involved in what you do is a nice way to teach them how the tax system operates. You can invite them to sit at the table with you while you fill out your tax paperwork, and you need to explain what the forms mean without overcomplicating the subject. Show them how much you have earned over the past year and the amount you need to pay Uncle Sam.
Although you are dealing with a serious topic, do your best to remain light-hearted and playful so that you won't lose their interest. If you would like to give your children a good shot at understanding the material, ensure they speak up when they have questions or concerns. Children can quickly get bored if they sit still for too long, but you don't have to go over everything in one day.
Teach Them About Tax Paperwork
Ignore this step if your children are not yet in middle or high school because it will be too complex for them to understand. If your children are old enough to grasp the concept, show them your tax paperwork and explain what the forms mean and how they should fill them out. Show them how to add up all of the money they made in the past year and how to list any deductions they have earned along the way. While you are talking, let your children review the paperwork to give them a clear picture of what you want them to understand.
Play Tax-Related Games
Since topics related to taxes can get boring quickly, using tax-related games can help you teach your children about taxes without causing them to lose focus. Depending on the age of your children, you can theme the games after their favorite shows or hobbies. No matter the type of games they enjoy, you can always find ways to integrate taxes for an educational experience. Be creative in your approach and ask your children for additional ideas if needed. For example, you could tell your children how taxes pay for space programs if they enjoy pretending to be astronauts.
Play Trivia Games
Teaching your children about taxes is a powerful way to give them a good start in life, but most people forget concepts they don't use a lot. Address this issue by playing trivia with your children after teaching them how the tax system works. You can quiz them on the things the government uses tax money to buy, but you can even throw in additional concepts if you think they will understand.
Giving your children prizes when they provide a correct answer encourages them to learn. How you implement the game is up to you, and many options are available. You can use flash cards and hide the answers on the back, or you can buy trivia games that you can connect to your computer or television. The idea is to make the game as fun as possible, which makes the learning process enjoyable.
Take Taxes out of Their Allowance
If you don't already give your children an allowance each week, it's time to start. Doing so teaches them about earning their money and setting a budget for the things they want and need. Give them chores to do around the house and pay them according to the amount of work they complete in a week. Before you begin, explain that you will take a small percentage of the money they earn as taxes. Your children could get confused about why you keep some of their money, so tell them what you will use it for, such as buying gas to drive them places or to help cover utilities.
Keep It Simple
Half of the adults in the country have trouble understanding each complexity of tax laws, and the other half roll their eyes in boredom when you try to discuss taxes. When most adults don't care about the tax system and have trouble understanding it, children don't have a chance.
Rather than explaining late fees, tax brackets and deductions, keep it simple and only give them information in small chunks. You can reveal a little more each time you are sure they understand the past concepts you have covered. Take your children's feedback into account, and you won't overwhelm them with too many facts in one sitting.
While tax-related topics are usually boring and complex, it's essential your children learn about them and how they work if they want to get the most from life. Making taxes into a game and keeping it simple at the start will get you moving along the correct path in no time. Inviting your children to ask questions reduces the odds of them falling behind and not understanding the message you wish to communicate.
Finding fun ways to share the information is vital if you would like your children to remember what you teach them. The tools with which you arm your children now can benefit them for the rest of their lives, and you might be surprised by how fast they learn.
Polaris Greystone Financial Group, LLC is a federally registered investment adviser. The information, statements and opinions expressed in this material are provided for general information only, are based on data we believe to be accurate at the time of writing, and are subject to change without notice. This material does not take into account your particular investment objectives, financial situation or needs, is not intended as a recommendation to purchase or sell any security, and is not intended as individual or specific advice. Investing involves risk and possible loss of principal capital. Diversification does not ensure a profit or protect against a loss. Advisory services are only offered to clients or prospective clients where Polaris Greystone Financial Group, LLC and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Polaris Greystone Financial Group, LLC unless a client service agreement is in place.