In the wake of the COVID-19 pandemic and the closures and restrictions that accompany that crisis, many parents have found themselves in the educator’s role, helping their student-children to finish the school year. In some ways, the transition to “home-schooling” has presented opportunities not found in the classroom setting.
With personal finance, home is where it’s happening
It’s personal finance we’re talking about here and there are few things more personal than one’s home. Most of our expenses are paid at home. Home is where our bills arrive and from which we pay them. Parents, therefore, have a living laboratory right before them when they’re taking on the educator role. Use it. Share with your children how to save for known expenses and prepare for unknown costs.
Inevitably, the initial step when getting a grip on budgeting is to look at actual income and expenses. As our worlds shrink to the perimeters of our homes, it can be easier to recognize and record the things we spend our money on and from where those funds derive.
Using a simple sheet of paper, parents can draw a line down the center and label the left side “Income” and the right side “Expenses” and have their children write down every item they can identify from both categories as they occur. Using simple math skills they can keep a running tally to determine if they are overspending or saving. Just as importantly, areas of expenses can be identified and addressed, if necessary. Parents should keep their own lists, as well, and share the lists with their children so they can get a glance into what adult life is like.
Save, share, spend
The lesson on what we do with our financial resources can be the greatest lesson of all. The decisions we make say a lot about ourselves. Do we prepare, do we believe in the future? Are we more interested in immediate results? Do we voluntarily share our earnings to help others?
Parents can educate their children that there’s a time and place for all of these spending choices. How and why those decisions are made and the consequences of those choices can help pave the road to financial freedom.
The “silver linings” of the COVID pandemic may be few and far between, but for parents helping to educate their children at home, using this time to teach personal finance habits should be one of them.
There are resources available to help with personal finance education. Watch students sharing their impressions of how financial literacy has changed their lives. Visit MillionairesClub.Org.