Can your kids read a paycheck?
Kids think that money grows on trees. My kids think that all you have to do is hand someone a debit card and you magically get to take anything you want home. They are three. Most kids don’t learn that money is a real thing until well into college when they start having trouble paying their credit card bill.
Learning how to manage finaces is a stage that all people go through when they start their career. Most schools do a horrible job teaching any aspects of what happens in the workplace.
You will have to take an active role in preparing your child. One place to start is how to read a paycheck.
Paychecks start by showing you how many dollars you earned. All kids will like that box. Then the taxes and deductions kick in.
Kids should learn that the government will take money out of their paycheck through several taxes; Federal Income Tax, Medicare, Social Security, Short Term Disability, and State Income Tax.
That is a lot of money that disappears right off the bat. When explaining these taxes to kids, try to focus on explaining what the money is used for in each of those buckets. Try to stay away from conspiracy theories and imminent collapses. Explain what programs get the money from each bucket and how they use it.
If you contribute to your 401k or have any other Before Tax deductions, explain how the money contributed to those is subtracted before some of your taxes are applied which lowers the amount of taxes you pay.
I don’t have any After Tax deductions, but I used to have my car payment deducted straight from my paycheck when I was in the military. It was a nice way to make sure that I always paid the bill on time. But, it was also a bit of a pain to sort out when I left the military and got a different job. The benefits and drawbacks of direct payment from your paycheck should be explained to your kids.
We all work for a living so that we can pay the bills and do the entertaining things we want to do. An important part of that is understanding how much you will actually be earning and where that paycheck goes. Take some time to prepare your kids for their future careers by explaining how to read a paycheck.
Tags: Career, kids, parenting, paycheck, taxes, workRelated Stories
POSTED IN: Career and Kids
4 opinions for Can your kids read a paycheck?
Matt Casto
Oct 24, 2006 at 10:13 am
My wife is a junior high special education teacher and she spends time each year teaching math concepts in real world scenarios. I know that she’s taught how checking accounts, debit cards, credit cards and cash work. This year she has a few special projects, one of which is to work through buying a new car, including getting a loan and figuring out the amortization schedule.
She does this on her own, but a lot of teachers don’t bother with these things because they don’t improve test scores; and we all know it’s all about the test scores these days. If it’s not covered in the test, it’s not worth learning.
You know, this kind of thing used to be taught in home economics class, but I suppose those have been cut from the curriculum due to limited funding, just like they’re trying to do with choir and band. But that’s another topic totally.
Reba
Oct 25, 2006 at 7:48 pm
I thought it was funny the first time my 3 year old grabbed my debit card and said “money”….but now it scares me.
Career and Kids » In case you missed it the first time
Dec 14, 2006 at 11:35 am
[…] Can your kids read a paycheck? […]
hey yall
May 29, 2008 at 11:02 am
Learning how to read pay checks is very valuable and is something everyone should difinitely know. Learn your stuff it will not hurt!
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