Mitochondria and Taxes

I remember very clearly the day my father decided to ruin my childhood and educate me on the existence of taxes. Taxes were, apparently, a method the government used to extract as much money from everyone as possible. Though a price tag may announce one sum that a person would have to pay, thanks to taxes, there was still a little bit more that needed to be handed over to appease the government. There was a tax on pretty much everything: a tax on food, tax on clothes (in some states), tax on income, tax on tobacco and alcohol, tax on cosmetics (in some states), tax on energy, tax on real estate—there was even a tax on death. With all these taxes, how could a person ever make enough money to enjoy comfortable wealth?

But I’m not writing today to talk about excessive taxation. I’m writing because I have no idea how taxes work or how to pay them. And neither do many other students my age.

Being financially literate entails that a person knows how money works and how to use it, both for buying small items and much larger, more expensive things.

Taxes, and understanding them, are a small portion of a greater concept called financial literacy. Being financially literate entails that a person knows how money works and how to use it, both for buying small items and much larger, more expensive things. Since most large purchases are made with credit cards, with checking accounts or with financed loans, having a good grasp on how each will affect one’s budget is crucial for staying financially healthy.

Unfortunately, quite a few people don’t really understand how loans and mortgages work. In a recent study, 65 percent of working adults considered themselves financially illiterate. Most had very little money saved for retirement, and upwards of 19 percent owed more money on their house mortgages than the total worth of the home.

Sixty-five percent of all working adults do not grasp how money works. Not only is this terrifying, it’s expensive; the less a person knows about finances, the less likely they are to make good and cheaper decisions when deciding to take out a loan or buying a car.

And this doesn’t just apply to adults; 39 percent of millennials feel anxious about their lack of knowledge about financing, and most students aged 15 to 22 do not feel comfortable with handling money. Though prospects for future money-savvy adults seem dim, there is a sliver of hope; many, at 43 percent, would feel better about finances if they were to take a class demystifying financial literacy.

That sliver of hope is taken away the minute one factors in how many people can really teach financial literacy. Unfortunately, teachers and parents are included in the 65 percent of working adults who are financially illiterate. Those that do understand may not be comfortable talking about money with others. No matter why there is reluctance to teach young people about money, withholding important information about finances from students is continuing a negative spiral which has been going on for decades.

This spring, Exeter seniors are required to take one last term of health class before they graduate. In this health class, I am told, students are taught financial basics such as paying taxes and taking out loans for college. Many of the seniors go blindly into the financial side of health class, knowing nothing about money or how it operates. If financial literacy was introduced earlier to students in their school careers, and if it was to become as important as geometry and the history 333, they might have an easier transition into college and life. Knowing how to pay one’s bills can greatly improve their ability to understand why the mitochondria are the powerhouses of the cell.