Talking To Your Kids About Taxes
How much should you share?
Your taxes are a major family expense, and at some point, your children will come asking questions about them. What should and shouldn't you share?
Two of the main factors to consider are age and maturity level. You know your own child better than anyone else, and making the decision to discuss your taxes is not to be taken lightly.
It is important for children to understand that family finances are a personal matter. They should also realize that, just because every penny isn't spent, it doesn't mean that money is available.
Like any other important conversation, prepare ahead of time, have your tax information in order and make a list of possible questions your child may ask, such as:
- If you are paid x%, why do you only bring y home?
- If we have b left over, why can't we spend it?
- Why is your tax percentage so high/low?
- My friend's dad pays c, does that mean they...
This is a personal decision for each family, and the goal of this discussion is to prepare your child for adulthood, and show them what to expect once they are a part of the working world.
Finally, but of equal importance, is a discussion on what taxes are for. What do taxes do? Why do we pay taxes? Why do some people pay more taxes than others? These are all questions that will lead your child to having a better understanding of how our social system works, and this conversation can be tailored to even a preschooler.
Tax time presents some teachable moments, but it's up to you as a parent to do the teaching. Good luck with your discussion and never be afraid to say you don't know the answer to their question. Finding it out together could be a great learning and bonding experience for both of you!