To aid your quest to promote financial literacy in your kids, here’s how to introduce this confusing (even
to grown-ups!) concept.

Keep it simple. Try: “Things like streetlights, schools and police and fire services are available to everyone who lives in America. We all help pay for them through fees called taxes that are taken out of our paychecks.”

Play “Who pays for it?” When you’re driving or walking, point out libraries, community swimming pools, crosswalks and the like. Ask your kids: “Who pays for it?” and remind them: “We do!” It’s also a great way to remind yourself of how your taxes are used.

Introduce a family tax. Start by withdrawing a 10 percent “family tax” from each child’s allowance. Put it in a prominently labeled jar. Every few months, decide together on a fun family use for the “taxes.” The idea, says Godfrey, is to help kids positively equate the word “taxes” with “benefits for all of us”—instead of “money down the drain.”

Source: Neale Godfrey, financial expert and creator of the kids’ money-education app Green$treets