Teach Them About Property Taxes
Learning the financial aspects of property ownership makes owning a home less overwhelming. One part of homeownership many find confusing is property taxes. Teach your children how property taxes are determined and how to budget for them.
Property taxes are determined by multiplying the assessed value by the local tax rate. In Saint Peters, MO, the property tax rate is 77 cents per $100. You can use a home that's assessed value is $200,000 as an example. If 77 cents are charged per every $100 of assessed value, a $200,000 home pays $1,540 in property taxes annually. Divide this number by 12 to find out how much to budget each month, which (in this scenario) is $128.33.
Help Them Learn About Sales Tax
Sales tax is important, especially if your children are saving for something. They need to understand how to calculate taxes into the total purchase price of any product. In Saint Peters, MO, the sales tax is 7.95%.
To get the total purchase price of an item, multiply the price by the sales tax. Then, add that number to the price for the total amount necessary. For example, you can find the total cost for a $100 item like this: $100 x 7.95% = $7.95 + $100 = $107.95
Provide an Allowance
Giving your children an allowance can help them learn to save and budget their own money. There are many ways to set up allowances for your kids, and it doesn't need to be a substantial amount.
Some parents provide an allowance in return for a set of chores. Others give an allowance for any chores over those they deem mandatory. For example, your teenager may be responsible for keeping their room clean and doing their laundry. For anything they do over this minimum, they receive a small payment.
Have Them ‘Pay Bills’
You may choose to have your children "pay bills" with the allowance they earn each month. In turn, you can place the amount they pay into a savings account for your child to use later in life.
Keep the "bills" children pay small. For example, let's say you give your teenager a weekly allowance of $50 weekly (or $200 monthly). You can then tell them they need to budget $25 toward rent, $15 for utilities, $10 for their phone, and $25 for assorted household necessities. If you begin placing this $75 monthly into a savings account when your child is 13, they have $4,500 before interest by the time they turn 18.
Financially Literate Children Grow Into Successful Adults
Teaching your children financial literacy helps them thrive as adults. One key aspect of financial literacy is math skills. If your child struggles with math, Dole Academy provides online kindergarten through eighth-grade tutoring to help.