The majority of the regular schooled population doesn’t learn about financial literacy till they become adults. This results in bad economic decisions which strand them with overwhelming debt. Understanding money matters is an essential life skill that all homeschooling teachers must impart to their homeschooled students. Three concepts that are mentioned here enlighten the finer points that homeschool students should comprehend.
Budgeting
This is usually the best understood and recognized. Having a budget implies that you have a limited amount of money and they you need to spend it wisely on things that you require. Playing games like Monopoly or Business, where the children can use play money to make purchases, plan their expenses and understand how to manage their resources are a great start to understanding how budgeting works. Smaller real life financial budgets can be worked out for grocery shopping, gift shopping, festival budgets, and family vacation planning to mention just a few.
Debt
Borrowing when you run short of funds from your parents is different from borrowing on credit cards or taking out a loan from the bank. Explain the extra money that they will have to pay as interest, and any fees that they will generate if that payment is not made regularly each month. Help your homeschool students understand how debt can build up quickly. Also teach them alternatives to getting themselves into debt. Have them realize that debt should be avoided as far as possible and that it’s better to save for what they want to buy before they purchase it instead.
Building Wealth
Savings can be in many different forms. Buying bonds, sticks, gold, or depositing money regularly in systematic investment plans. Explain the different options available for saving money to your homeschool students. Teach them about diversifying their financial portfolios. Show them how you invest your money. Explain the concept of compound interest in wealth building. Make it a habit for them to ensure some part of their monthly income goes into a form of saving. Help them understand their financial goals for long and short term. Then teach them how they can finance the goals with their savings.
