One of the many challenges for families during the COVID-19 pandemic is homeschooling or remote learning. Suddenly, millions of the country’s moms and dads have found themselves thrust into the role of teacher assistants or even tutors. Sometimes, both at once and often while also juggling a job and/or other caregiving responsibilities.
As well as putting pressure on their time, patience and confidence when it comes to teaching certain curricula, the need to educate kids at home also brings with it some unexpected costs for parents — everything from the proper home setup and school supplies to support services, such as tutors and additional childcare. Some may even choose to send their children to a private school if their usual public school remains closed.
If you and your family are in this situation, you may be wondering how to manage these new expenses without affecting your overall financial plan or even pushing back your retirement. Here are some steps you can take right now to help:
1. Create a budget
Start by separating your non-discretionary spending, such as rent, a mortgage, groceries and medicines from your discretionary costs, like personal grooming, eating out and family vacations — many of which are less accessible right now anyway due to the pandemic. Then create a realistic monthly budget that you and your family can stick to while still leaving room for pleasure. Anything left in your budget can be used to cover additional homeschooling/remote learning costs or be put into savings.
2. Team up on costs
If you decide to go down the home tutor route, check if any friends, family or neighbors are planning to do the same. If so, maybe you could team up the kids for sessions together — within social distancing guidelines and with small groups you trust. With the timing of a mass return to traditional classrooms still uncertain, funding your share of group lessons rather than one-to-one tutorials could significantly reduce your expenses. Sharing costs with another couple in your pod can be great way to pay for a babysitter, as well.
3. Build an emergency fund as you go
Emergency savings help you prepare for unexpected financial challenges, such as reduced income, increased childcare or, of course, extra homeschooling costs. These can be especially daunting if you’ve already had to dip into your emergency fund as a result of COVID-19. If possible, set yourself a manageable monthly savings target, ideally using money you may have spent on the kind of discretionary items highlighted above. Try to stick to your target and keep track of your progress. A good rule of thumb is to build up enough of a cash reserve to cover your family’s needs for 6 months.
4. Assess your life insurance
The coronavirus crisis has naturally brought life insurance to the front of many people’s minds. The whole point of life insurance is to replace your income so your family can function if something were to happen to you. That makes sense for the spouse who goes to the virtual office every day, but what does that mean for the non-working parent? Even non-working parents may need term life insurance because of the services they provide, like childcare — or in recent times — both childcare provider and teacher. If something were to happen to the non-working parent and the surviving spouse can’t quit work because they still need to bring home an income, that’s where term life insurance kicks in.
If you need advice or support regarding how to fund your children’s homeschooling or remote learning needs, additional tutors or part-time childcare while limiting the impact on your finances, speak to a financial professional. They can provide guidance on how to build an effective family budget and advise you on any potential opportunities or risks associated with your current investments, savings and tax liabilities.
Of course, the most important thing is that your children continue learning as safely and normally as possible. But by making the best decisions for your family’s specific needs, you can help ensure the need to spend more on their education in the short term doesn’t derail your financial plans or retirement ambitions in the long term.