The Importance of Personal Finance in HomeschoolingOctober 19, 2020
Learning how to properly handle finances is a critical part of the educational process. It can establish a financial foundation that can serve an individual throughout the rest of their lives.
When teaching financial education, the goal should never be to develop an unhealthy love of or obsession with money. On the contrary, teaching a child the importance and power of money from a young age is an ideal way to help them ultimately control their money — rather than the other way around.
The Importance of Personal Finance in Homeschooling
A child has formed many of the money habits that they’ll take with them through life by the tender age of seven. In other words, when you take a break from school to take little Johnny or Suzy to the grocery store with you, you’re actively teaching them how to manage money. When you tell your second grader that you’re paying the bills, they’re learning how to handle finances right there and then. When you decide to splurge on something that you don’t really need — especially if you don’t have the money — your kids will be watching, soaking in the lessons involved.
All of that to say, you don’t want to be so afraid of teaching them about money that you wait until your kids are in high school or college to start on the financial basics. If you wait until then, your kids might develop their own, unguided views toward money long before.
Indeed, parents need to teach their children about responsible monetary matters at a very early age. Nowhere is this more true than on the homeschool front. If you’ve opted to educate your child at home (or the pandemic has them learning virtually), it’s even more important to expose your child to the various financial responsibilities and lessons that they witness on the homefront.
The best part is, many natural opportunities exist within your home that provide the perfect opportunities to teach your child about personal finance. Taking advantage of these can be an easy way to cultivate curiosity and keep them interested in the subject. Rather than falling back on a dry textbook or random analogies and examples, you can show them how finances directly impact their own lives.
If you can steadily develop an interest, understanding, and appreciation for money in your homeschooler, you’ll be able to equip them with one of the most crucial life skills they will ever need.
Personal Finance Topics to Cover with Your Homeschooler
Proper financial knowledge is a key ingredient in helping your child survive and thrive later in life. As the financial guru, Robert Kiyosaki, put it, “The only way to get out of the ‘Rat Race’ is through financial education. You must learn about money, accounting, and investing.”
Learning About Money
Learning about money doesn’t mean you need to start teaching your child about credit scores and compound interest while they’re in preschool. Financial education should be a gradual process that starts with basic lessons about how money works.
Up through kindergarten, the goal should be rudimentary elements, like waiting to purchase something. This instills a sense of the power of money itself. It teaches that it can provide something that you want, but not everything that you want. It also can help a child understand the transactions involved in working, being paid, and then using that money to purchase something you want or need.
Learning About Accounting
Between 5 and 10 years old, the emphasis should shift towards the finite nature of cash and how to make wise choices when spending it. This can be a good time to begin introducing basic concepts like accounting and budgeting.
Have your children set up a piggy bank and then encourage them to divide any money that they receive between savings and spending.
Learning About Investing
As your child enters the preteen years and you being to prep them for the heftier financial freedom that comes with being a teenager, you should focus on topics like savings and interest. If you’ve been educating them all along, then by this point they should have a firm foundational knowledge of how money works along with basic concepts like income, expenses, and savings.
Now, begin to show them how they can invest their money. Teach them the power of compound interest. Help them develop a respect and appreciation for things like credit and debt. Explain how debt means you can get something sooner, but it will cost you more. Show them your credit score and let them know that a good score can help them get better interest rates, start a business, get approved for housing, and even get a good job.
Equipping Your Homeschooler for the Future
Homeschooling can feel complicated and overwhelming without adding extracurricular subjects into the mix. However, you and your homeschool students should view financial education as more than an “extra lesson.”
Learning how to properly respect and handle money is a key skill that they will take with them throughout the rest of their lives. Fortunately, you don’t have to invest in an expensive curriculum or take up large parts of your day teaching these lessons. You can take advantage of the natural personal finance activities taking place right in your own home every day. These simple lessons can go far in equipping your homeschooler in the here and now for a successful financial lifestyle in the future.
More about the author…
Sam Bowman is a writer who enjoys getting to utilize the internet for community without actually having to leave his house. In his spare time, he likes running, reading, and combining the two in a run to his local bookstore.