Most students work in restaurants, retail or odd jobs. I did, however, work in a tax office for over two years in high school. This experience allowed me to understand how well the general public understands basic finance and economic processes. Spoiler alert: not much.
During my usual duty to answer the phone, I received hundreds of questions that seemed thoughtless and silly. The most common question I heard was “When do I get my money?” even though they weren’t supposed to receive a refund. That would warrant a long conversation about how the IRS and the North Carolina Department of Revenue actually received their tax money because the person on the other end of the phone just didn’t understand the operation of the process.
I’ve often wondered why adult people who have worked for 20 years or more don’t have the basic sense of what a W-2 form is and why their tax preparer needs it or even what their numbers are. routing and bank account for their reimbursement. However, I have come to understand that it is not their lack of common sense that has caused an epidemic of economic ignorance, but due to a lack of proper economic education.
As children, we assume that our parents will teach us what we need to know about filing a tax return when we enter the workforce. However, I can testify that a majority of parents don’t know either. Because April is Financial Literacy MonthI thought it best to look at some data on young adults and their understanding of taxes and money management.
Everfi, an institution that partners with schools to teach financial literacy in innovative ways, conducted a series of surveys. Their findings show that more than a quarter of students feel unprepared to manage their personal finances after school. Additionally, nearly 50% of college students believe that in their future job they will not have to pay any federal income tax at all, and if they do, they will receive a refund regardless of the amount they pay. they pour.
Everfi said 63% of college students say their parents are responsible for educating them about money management. Meanwhile, only 26% of adults feel equipped to educate their children about money and economics. Finally, 83% of students think that personal finance and economic processes should be required for graduation, and I totally agree.
Although high schools should make economics a required course for students to learn finance early, colleges and universities should also require all students to take courses in economic and tax processes to deepen this process of understanding. learning.
Teach students the information they need to provide when filing their tax forms and the different types of deductions and forms. Teach students about financial aid or how to complete W-4 forms for graduates entering the workforce. Most colleges and universities have financial resource centers, but I’m sure everyone has had a bad experience on the other end of the line with someone from that office.
Colleges could require online financial literacy workshops as well as the mandatory drug and alcohol workshops that all students already take each year. The point is, a student shouldn’t have to major in accounting or economics to have a general understanding of economic processes and money management.
If you are a student who needs more information about filing your next return, I recommend you read this online tax guide for students. This article talks about all the basics of filing taxes as a student, including tax forms, how to incorporate your loans and grants into tax returns, and more. Or, if you’re having trouble figuring out what to bring when filing your taxes, here’s a list from NerdWallet to help you get started; some basic things include your W-2 form and your college transcript.
The only cure for an epidemic of ignorance is education, and it should start at the high school level and should extend beyond two weeks of balancing a bogus checkbook and budgeting for a bogus family in a civics class. However, financial literacy should also be strengthened by colleges and universities that have better means and resources to achieve it. Everyone should be aware that a basic understanding of economics and taxes as a young adult is crucial for survival.