“The best way to teach your kids about taxes is by eating 30% of their ice cream.” – Bill Murray. 

Many years ago, we were planning our first foreign family holiday to Florida, so the kids were talking through where we should go, and what we should see. No prizes for guessing that Disneyland was top of their list followed by every other theme park you could think of. 

As we approached the thorny issue of who was paying for all this, I assumed the role of guest lecturer at the ‘School of Financial Awakening. 

“Okay, let’s have a look at what this will cost. Flights, villa, rental car, park tickets, food, fuel and spending money.” We itemised everything and added it up. It came to around £4,000So, I asked them, “How much do I have to earn to pay for everything on your list?” After an exchange of bemused looks from the kids, one said, “£4,000! 

Take a seat kidstoday’s ‘life lesson will follow shortly! 

I took a large piece of paper and wrote £7,000. More bemused looks from my novice students. I explained that what hits our bank account is what’s left after taxes and National Insurance. Higher rate taxpayers are left with a bit over half of what they earn.

then explained that when we spend what’s left on legitimate stuff like fuel, flights and visiting attractions, we pay tax again. At which point one of the kids asked, “So where does all this money go, and what do they do with it? 

Great question. 

At Stewardship Wealth, we work hard to minimise the frictional effect taxes can have on your wealth and income. If there’s an allowance, we make sure you don’t miss out. If there’s a legitimate way of keeping your taxes at a lower level, we will explore it. But we won’t “let the tax tail wag the investment dog.” Planning is a balancing act. Navigating the changing tides and choppy waters of taxation is complex but we never jeopardise the balance of the overall plan by giving tax more attention than it deserves. 

We use the widest range of tax products as best suits each client outcome. The more choice we have, the more options we can create. The more options we can create the more variations we have available. The more variations, the more solutions we can come up with. 

By the way, our holiday was fabulous. Taking our cue from financial and wealth planning we created a range of choices, some days theme parks, next day water parks, next day beaches. Wnever allowed one person’s preference or one type of attraction to dominate. We created a full range of options and our itinerary made the best use of my net income!  

The lesson on tax wasn’t wasted either. The kids worked out how much I needed to earn to go again the following year!