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Financial Tip

Oliver Wendell Holmes, former Justice of the United States Supreme Court, once said, "Taxes are what we pay for a civilized society." Although people work hard to meet their needs and the needs of their families, there are some things they cannot purchase themselves. For example, the taxes paid to state and local jurisdictions help pay for police and fire protection. These taxes also pay for the operation of the local governments, and for local recreation areas such as parks and other public facilities.

On the national level, federal income taxes help pay for defense for the country. They also pay for capital facilities such as highways and other transportation services, and to help those who are poor or ill. These are all services that individual citizens cannot purchase the way they can buy food and clothing and the other necessities of life. When people live together in a society, all of its citizens bear the cost of providing such services. Taxes are the means by which the society raises the money to cover these public costs.

The United States Department of the Treasury has a number of fact sheets that can help people better understand the various taxes imposed in the United States. These include: Economics of Taxation explains how taxes support government services and benefit the country's citizens. Writing and Enacting Tax Legislation explains the process for developing and passing legislation into law.

In addition, Lesson 1.5 of the Yes, You Can Curriculum includes classroom examples of how taxes are collected and used by the various jurisdictions.

Source: Adapted from United States Department of the Treasury.

Well, Whaddayaknow?

Started by the Jump$tart Coalition for Personal Financial Literacy in the year 2000, April marks the 11th annual Financial Literacy Month. That makes spring a perfect time to focus on your kids' financial education. All year they've been filling up their heads with facts and figures on many subjects. But have they learned the essential facts about money and how to get on the path to financial independence?

Making sure kids learn these important lessons is one of the goals of Yes, You Can. Jill Grotzinger, a partner in Experience Design Innovation Group LLC (EDI), the Yes, You Can curriculum designers, recommends starting by playing the Whaddayaknow? Game Show with your students or kids. "It's fun to do, and can be used several ways. It's a great introduction to financial vocabulary and terminology. After finishing the Yes, You Can curriculum, teachers can also use the game again as reinforcement before testing," Jill suggests.

Download the Whaddayaknow? game.
To play: Select the value and use the delete key to reveal the question. Select the question and then use the delete key to reveal the answer.

The curriculum provides step-by-step instructions for playing the TV-style game, including:

Creating a game board on the wall using the print-ready materials or using a computer to play electronically.

Setting up teams of three to five students.
Asking each team to create a one-word name, such as Brainiacs, and to select a spokesperson and scorekeeper.
Going in alphabetical order, each team chooses a category and dollar amount, such as "Income" for $200. Terms and definitions are revealed as each team gives an answer.
Having scorekeepers calculate scores and determine the final score once the last box has been selected. The team with the highest score wins.

In each category, student will learn definitions for five financial terms:

Spending - wants, advertisement, fixed expense, credit card and debt.
Saving - savings account, emergency fund, comparison shopping, compound interest and Pay Yourself First®.
Income - paycheck, net worth, profit, taxes and easy access credit.
Planning - financial goal, spending plan, opportunity cost, systematic decision-making and inflation.
Investing - portfolio, stock market, risk and reward, share and mutual fund.

As each correct answer is revealed, the teacher can discuss these terms and what they mean.

The Yes, You Can curriculum starts kids early on the road to financial independence. They'll learn that their ABCs should also include Assets, Benefits and Credit and the 3 R's can refer to Revenue, Rent and Retirement!

Teachable Moments

You can use the curriculum at home by clicking on "Educators." Signup is free.

The Yes, You Can curriculum includes adult dialogue activities that help parents discuss financial matters with their kids. One activity encourages parents to ask their children, "Who do you think is more financially independent? A movie star or a grocery store clerk?" The discussion that follows should help kids understand that it's not how much money a person earns that defines whether they are financially independent, but how they use it.

Bottom line, anyone can be financially independent provided they choose to be.