Homeschooling families need to do a lot more financial planning and they need to be able to manage limited resources, because in most cases they have to live on one salary (in addition to, at best, a variable second salary). So the usual redundancy is not there (if one parent is laid off, while the other one is still working). This requires a much more frugal way of life, but I think that homeschooling lends itself nicely to this type of approach.
It can be done by anyone, even if you are not earning that much. Here’s how to make it work. First, you need to do a thorough financial analysis, including having a budget that is stuck to. It is very important to realize that you will not be able to afford certain things, and you don’t want to waste your money on them.
1) A house. In Massachusetts, unless you live outside of 495, a house is more expensive than an equivalent house/apartment to rent. I’ve been doing this analysis for a while, so if anybody is curious, I can show you how this math works. We are renting an apartment in Newton, and the landlord is barely breaking even, even though he bought it in 1999 (so if anybody really thinks they save by buying a house, the proof is on them to show the numbers – very few people can beat renting in high cost states such as MA and CA). In addition, we are doing just fine with 3 kids in a 2 bedroom/2 bath apartment, so there is no need to rent a huge house, and you can also rent in the best towns without having to pay the exorbitant real estate prices. Of course, after your family size grows beyond 3, you will need more space, and with rents going up, this is one dilemma we are facing right now. But if you have only one or two children, an apartment will be just fine for many years.
2) College savings for the kids. If you can not afford it, don’t even bother, because your retirement might be the casualty of your children’s overpriced (and often useless) degrees. Higher education is very over-rated, not to mention expensive beyond imagination, so my advice is to try to find other alternatives. They will have to pay every penny, or work for it. Real estate and college costs are the two biggest sources of waste for most families, and if you can avoid wasting money on both, you will be in great financial shape.
There are many other ways to save such as cooking at home and not eating out, doing netflix nights vs. movie nights, going to the Cape Cod vs. Bermuda. There is another aspect that is also very important. Teaching kids how to be entrepreneurs, and helping them earn money from the very early age. Anything – from dog walking to a paper route can be a good start. Opening their own bank accounts, advertising for their business, learning the necessary skills to be a successful entrepreneur (not just wild ideas, but practical ideas that can be simply implemented with little expense). This can enhance the earning potential of your children, who will become independent earners instead of dependent spenders (like many children in school are).
While the spending decisions that can be implemented relatively easily, raising your kids to be entrepreneurs requires a lot of work (and there is no guarantee that they’ll succeed). But it is the journey that’s important. If you provide your kids with the resources to take full advantage to develop their potential, the results will not disappoint.