We've been talking Tax and Superannuation

 

This month I had the opportunity to talk to some lovely people from the Australian Taxation Office about educating kids. I was feeling pretty confident prior as I had already been proactive about money management with our older children but then I found out they were talking about educating children and how to talk to them about Tax.  Ahhhh nope .... no idea, hadn't crossed my mind, zilch discussion, we should really do that but what do I say?

Talking Tax And Super With Kids

Over the last few months we've been getting our 8 year old more educated and involved in his money management. Money is one of those things I think is essential for my kids to be fluent in. It's a life skill that although I know they learn concepts at school I need to ensure that they fully understand. Let's face it, they are going to need it and need to know how to manage it the best they can no matter how much they have in the future.  It would also be good if they could look after me in my old age.

A few months ago we opened a bank account. I had to open the account in my name so I could get a keycard. He needs to know how to use and manage money in our cashless society.  No bank I spoke with has a children's account with a keycard.  
When we went on holidays he had his keycard (in my wallet) and could use it when he wanted. Much better than him carrying a wallet full of coins. He also learnt pretty fast that money on a card isn't limitless.

He earns money for above and beyond. We don't do pocket money as such, he has a couple of jobs to do during the week and he helps when needed but we call that just being a part of a family, where everyone contributes.   He earns money for bigger projects like sweeping out the garage, vaccuming the car and I have a reading contract with him,if he reads and finishes a chapter book of my choice and writes me a little report then I pay him some money. He's pretty keen to read now too.

It's been fun to see him become interested in starting a business, its clicked he needs to earn money to spend money. Although he's a little off being a self-made zillionaire I'm hoping he comes up with a cool idea and we can actually get something going one day.  
Of course with a business or even just getting a job there are expenses and he'll have to pay tax.  Tax? Yep son it's one of those things you will have to pay out of the money you earn.

Do you remember learning about Tax or Superannuation at Primary School?  I don't, other than the weekly school banking and learning what all the coins and notes are I really didn't know anything about economics until high school.
I'm sure Tax and Superannuation is something they cover at school but being fluent is essential and ensuring my kids have a thorough understanding is up to us as their parents. I know I should have looked after my Superannuation more when I was younger and had lots more disposable income ... and no kids or mortgage.

So we talked about how when you get a job after a little while of earning you have to pay Income Tax. There are more taxes in life yes but we just covered Income Tax.  Income Tax is money that comes out of your pay and goes to the Government. The Government then uses this money to help keep our country and everyone that lives here educated, healthy and safe.  
We came up with a list of things that taxes help to pay for; schools, libraries, parks, defence forces, emergency services and medicines.  It was pretty easy to come up with things once we started.  He now understands why there are taxes and what would happen if we didn't have parks to play footy on, schools and teachers to educate, defences to protect our country and emergency services to help, protect and keep law and order. The Government collects the money and distributes it on behalf of all the citizens of Australia.

Superannuation is money your employer you has to pay, it goes into a fund of your choice and it stays there until you reach a certain age. Kinda like a bank account and you can only save money not spend any.

A Superannuation Fund is for when you get old and retire, so you still have money to live off. Generally your employer has to put money into it, then if you go to a different job your new employer can put money into your Super Fund, if that's what your want.  You can also put more money into it yourself which would be a clever thing to do if you can afford it, in case you don't have enough when you are older. Generally the more that goes in there the more money you will will have when you retire.

 

It's been interesting discussing and talking about Tax and Superannuation with our older sons, I feel good they have a better understanding now. Have you talked to your Kids about Tax or Super?  How did you go?  What else do you think is worth discussing when it comes to teaching economics at home? 

This is a sponsored post with thanks to Kid Business Communications as per Type 2 of our disclosure policy

 

The ATO has some great resources online if you looking for information, click her for details

 

 

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