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“I Hate the Government”


Princess received her largest paycheck to date this past week and she was super excited! Until she saw it…

She makes $8 per hour and had worked almost 60 hours over a two week period. She was feeling good and had a plan for her money.

  • She has learned to live on the $30 per week allowance I was giving her last spring. So she based her financial plan off that knowledge.
  • She’s been saving upwards of 60-70% of each paycheck.
  • And now that she will be responsible for her 1/2 of her car insurance and all of her phone bill, she worked out how much she needed to set aside each pay period to cover her $170 per month in bills.
  • Princess was excited…

And then she took at a look at the taxes and other government monies taken out. So she came in with her paycheck, rushing to the bathroom and screaming “I hate the government.”

I just had to laugh. They only took just over $50 out for state income tax, medicare and social security. But she missed that money! There aren’t taking any federal taxes out, which surprised me, but maybe that’s common since she would get it all back anyways.

Either way, it led to an interesting discussion on taxes and politics and different views on government, etc. It was educational and a little bit funny.

Taking on Some Responsibility

Princess settled into the idea of needing to pay some of her own bills easily. This was expected after watching the twins begin to pitch in when they were her age. She’s always witnessed their responsibilities grow as they got older and more independent…well, at least a little. And like them, she knows that this is part of growing up.

It was just this year, at 21 1/2 that the twins began paying room and board here at home, got their own auto insurance policies, and just last week History Buff decided to get his own phone service.

I let Princess know that I would help her buy one more phone when she was ready, but after that she would be solely responsible for those upgrades as well. (She started making noise about her phone needing an upgrade a month or so ago, but when she realized that I wouldn’t be replacing it like I have in the past, that noise has quieted. I have told her how much I would contribute and they rest would be up to her.)

Because Princess is so far ahead in school, (if we had pushed, she could have graduated last year) one of her classes is work based learning. As a result, she is able to work more hours. She only has to be on the high school campus for one class every day and it gets out at 11am. Two days a week, she has two college classes, also on the high school campus. But three days a week, she is pretty free. She will begin working doubles a couple of days a week and is excited that she can maintain her working hours while going to school.



  • Reply Cwaltz |

    You should show her how to check her withholding that way she understands what it is and how it impacts her. You should also remind her it could be worse. She, unlike you, only pays HALF of her social security and Medicare savings. As a private contractor on end up paying both the employee and employer portion.

  • Reply Lisa |

    Taxes are always a shock at first. It’s nice she’s able to knock out some college credits already. Did you ever hear about a refund on the tuition you payed her old school?

    • Reply Hope |

      They have refund $1,100 and are considering my request for the additional $1,500. According to them, I needed to let them know she wasn’t returning by May 1.

  • Reply Drmaddog |

    Have her open a Roth IRA NOW — vanguards total money market index fund would be ideal. Even $100 a month toward retirement at her age will grow exponentially over the next several decades to more than if she puts a few hundred away but starts in her twenties. Plus, she’ll develop the habit of saving for herself first and living on what’s left.

    • Reply Hope |

      That is a wonderful idea. Any suggestions on balancing her saving for college and her retirement savings?

  • Reply Reece |

    30% Roth, 30% college, 30% regular savings, 10% spending? You know how emergencies can creep in, even before she leaves home for college! She should have a safety net in savings separate from college bill savings imho.

  • Reply Drmaddog |

    With $480 a check (approximately 960 a month) before taxes, and the senior year before college, her ability to save significantly for college is limited. She may need to accept that working through college, part time classes, and/or loans will be necessary. (If takes takes out loans, she should pay the interest so that when she graduates she owes only the principle).

    As for the 960, if she has, oh $750-800 remaining after taxes, $100 a month for a Roth leaves her maybe $650-700 to pay her $170 in bills and $480-530 in excess. If she uses $200 for personal spending for the month, that leaves $280-330 to divide among long term/emergency savings and college.

    I know there are many who would disagree with this division, but the reality is that this is a teen who is not going to be able to save enough to fully fund college. Given that, I think the harnessing the power of time and growth makes funneling a portion of her pay into a Roth an attractive option. Assuming she increases what she puts away as her income grows, she could have a quite large retirement account by the time she is in her sixties.

  • Reply angie |

    I’ve always thought kids assets were held against them in the FAFSA. Basically, by having savings for college shell get less financial aid. Meanwhile I believe IRAs are exempt from FAFSA consideration. If so, that’s a great reason to put all of the money in an IRA. You can always withdraw your IRA contributions without penalty. So theoretically she could put all her savings into an IRA, get financial aid and student loans for the full amount, then withdraw the IRA contribution at a later date to pay down her loans.

    Please don’t take my word as gospel. Do the research for yourself. Im mostly speculating off some initial Google searches. But I think you’ll be able to find some more info.

  • Reply Drmaddog |

    Another interesting option. Just make sure the withdrawals are done according to tax codes to avoid penalties and whatnot. And two, she should understand withdrawing from retirement accounts should only be done in extraordinary circumstances. Too many people see IRAs and 401k as piggybanks. If she did this, it would be wonderful if she got to the point to taking our to pay down loans and decide to figure out some other way so that she doesn’t raid her retirement.

  • Reply SMS |

    Setting up an IRA with part of her earnings is a great idea. But otherwise, I am a bit disturbed by her working doubles at a minimum-wage job while she is still a student. Isn’t her real job to excell at school, including the college courses she is taking, and plan for college? She has only one time to be a high school student, but a lifetime ahead of her of working.

    • Reply Hope |

      She loves her job. And truly enjoys begin valued! It’s also her choice to work the added shifts.
      She excels at school without much effort. And she’s only got the two classes, twice a week that require outside work. So time is something she has plenty of these days.

  • Reply Drmaddog |

    It’s an important milestone for growing children, adolescents, teens, and young adults to learn the action/consequence (work/benefit) relationship. Not just the financial reward but the pride that comes from an honest day’s labor, no matter the type. All jobs are needed, and any honest labor is worthy, IMO.

    As to what cwaltz said: Excellent idea! and one that is too often overlooked. In addition to that, I would add, explain what the taxes go towards and the importance of contributing to the support and function of society. Roads are paved, fires are extinguished, libraries are open, transportation is available, children are taught, food/water are safe, medications are efficacious, research is funded, etc etc. Also, discussing donations to a charity/cause important to her could be introduced.

  • Reply Ellen |

    A Roth IRA is an excellent idea. Have her do an automatic transfer every paycheck. even if it’s a small amount per check, it builds up. Another good option is savings bonds. They no longer do paper bonds like they did when my kids were little but I used to buy them bonds every birthday to give to them when they became adults. I preferred I bonds over EE bonds but look at both and have her make a decision. It’s another easy way to save.

So, what do you think ?