Here’s an admission guaranteed to win me friends and impress my tween:
I love thinking about taxes.
That’s not the same as loving to pay a lot in taxes (though I make sure to pay the taxes I owe, if there are any IRS agents reading this!).
Thinking about taxes informs the decisions I make with spending.
Ask yourself this: how much do you make after taxes? What’s the exact number? Everyone knows how much they earn in a year – that’s the headline number. But how many people know what their after-tax pay is?
I want to try to teach my kids and others simple tax math. I want them to know how much you need to earn in pre-tax dollars to buy an iPhone, a car, a house. That’s a life skill.
So how do I teach them tax math? With Play-Doh of course. You can see a demonstration in this recent video. But it’s simple. Ball it up. Roll it out like a hot dog. And then cut about 40 percent of it off – or 55 percent if you live in California.
It’s dramatic. Now, Dr. Brad Klontz, a Lead Dad and financial therapist who will be on EP 5 of The Company of Dads podcast on Tuesday, has a scarier trick: he takes a measuring tape, asks you to estimate how much longer you think you’ll live and then cuts off all the inches of your life so far. (Imagine saying 85 and then having 48 inches cut off of the tape!) It steels the mind to focus on what you can control.
That’s a tad too scary for parents to show their kids – half of Daddy’s life is gone! – or for us to want to see ourselves. But Play-Doh and taxes makes a clear point that’s going to help your children about money – without giving them nightmares.