We all remember that first summer job after our 16th birthday. Some of us can remember bussing tables, working the drive thru window or mowing yards for some extra money.
All three of my kids were swimmers and the natural first job at 16 was lifeguarding. As a financial advisor, I insist my children save a large portion of their earnings. I do encourage them to spend some too!
My youngest child, who is 16, received his very first paycheck recently. He has always been the best saver and spender of my three children. He just gets it.
He took one look at his paycheck and did something very different from his older brother and sister. He complained.
He didn't complain about the amount of the check. He really fascinated me by complaining about the taxes taken out of his check! He commented on two different aspects of the tax withholding.
First, he noted that the dollar amount of the taxes withheld could have bought him something else.
He shouted, "I could have purchased a video game with the money!"
He was learning the true value of money. I've never been more proud!
Second, he monetized the tax according to hours of his life. This comment fascinated me the most. He said he traded 9 hours of his life just to pay the tax. I just didn't have it in my heart to tell him how many hours of his life he has yet to give for his tax bill!
The point of my little story is this. We all should be aware of our tax bill. We should know how much we pay and why we pay that amount. We should also know how much of our lives are traded in order to pay our tax bill. Don't feel bad if you don't have a clue about your tax bill. I've met very few people who do know.
Take the time to look at your tax return to better understand it. Let's face it, you'll file a tax return the rest of your life. You might as well know more about it.
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