Many traditional forms of education fail to instruct students about the practical aspects of managing money. According to a recent study from the University of Chicago, nearly a third of young adults were found to be “financially precarious” because they had poor financial literacy and lacked money management skills. Money management is one of the ways a homeschooling curriculum can better equip children by tailoring lessons to practical needs. Like lessons in home economics or social media, incorporating money management into your curriculum helps prepare children for the challenges of adulthood through homeschooling.
Digital Spending Lessons
Most money is exchanged invisibly, through methods such as credit cards or online banking, which means that children do not often see their parents make payments via notes and physical cash. It’s important to emphasize to your children that the money we spend online is real: credit cards and online payment systems come attached to serious responsibilities. However, you can also use digital banking methods to teach kids about the financial elements of online banking as part of their homeschool curriculum. For instance, many homeschooler parents ask their kids to create an online budget, allowing them to divide their budget into spending, charity and savings. These actions help highlight the role of technology in exchanging invisible money and foster good saving habits from a young age.
Teach Them Opportunity Cost
Opportunity cost is another way of saying, “If you buy this chocolate bar, then you won’t have the money to buy that ice cream cone.” The condition that exists because human wants exceed the capacity of available resources to satisfy those wants; there are also instances in in which a resource has more than one valuable use. Explaining the role of opportunity cost helps your children learn to weigh their options and imagine possible outcomes in big and small money decisions. The goal of studying the concept of opportunity cost is not to make your children constantly second guess their decisions, but to rather to stress that their choices do have consequences.
Opening A Bank Account
From a young age, piggy banks are a fun way for children to start learning about money through saving. Compared to traditional banking, they are a more tactile experience than putting money into a bank account. However, once your child is old enough to possess substantial amounts of money, it’s a good idea to open them a juvenile savings account attached to one of your bank accounts. Typically, these accounts are registered in a child’s name but linked to his/her parent’s bank account, so the parent has full control over the transactions .
The best parents teach by example: showing your kids instances of financial decision-making from a young age helps equip them for the decisions they will make as responsible adults. Luckily, a homeschool curriculum allows parents to devise unique methods for stressing practical aspects of economics that play into how we spend our money on an everyday basis.
Credits:
Article contributed by Karoline Gore
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