The decision to homeschool is a significant one that requires pre-planning and budgeting. Homeschooling is on the rise in the United States, with over 1.5 million children educated at home in 2007, the most recent year for which Department of Education statistics exist.

Once you have decided to homeschool, there are several steps involved in setting up your home classroom and getting ready for the start of the school year.

Comply with the Law
Homeschooling is legal in all states, but each state has its own rules. Some states do not require the parents to have any contact with the local public school system at all. On the other end of the spectrum, some states require parents to follow a set curriculum and to report test scores. In some cases, parents are required to have teaching qualifications and submit to home visits. Research your state's education laws and ensure that your plan will comply. Contact your local or state homeschooling association for support and information on starting your school plan.

Set an Annual Budget
There is a cost associated with homeschooling. You will have to plan for expenses like curricula, textbooks and field trips. You will also have some of the same expenses as if you were sending your children to public school, including composition books, lined paper, and pens and pencils. Make a list of everything you will need and price it out so that you can set aside funds for both startup and ongoing expenses. According to experts, the annual cost of homeschooling one child can range from $300 to $2,500 per year, depending on the supplies needed. In some cases, you may consider hiring tutors for teaching higher-level courses.

Develop or Purchase the Curriculum
If you live in a state that does not mandate that you follow the public school curriculum, you have many choices. You can develop a curriculum from scratch and set up your own modules. This is a highly customized and time-consuming approach, but it can be the least expensive choice. Parents who have a teaching background and who have experience building educational units are more likely to take this approach. You can also purchase pre-packaged curricula that can include teacher's notes, textbooks and worksheets. Buying educational material can add up quickly, but there are also many sites online with free homeschooling materials.

Set Your Schedule
Decide how many hours per day you wish to homeschool and whether you will school year round or have breaks. Divide the curriculum into time periods and make a frank assessment of how long it will take you to get through it. When you are first starting out, teaching the material may take more or less time than you initially expected. You may have to adjust your schedule partway through the year to cover everything you planned. Keep notes that you can refer back to next year when you are setting the new schedule.

Keep Detailed Records
If you live in a state with reporting requirements, you will have to keep records of both teaching and testing. Even if it is not required, it's a wise idea to detail out what was taught on a day-by-day basis. This gives you a structure to follow in subsequent years or with other children. It can be as simple as making notes in a day planner or you can use one of the many software programs available. Store your notes in a location that can be easily accessed, as you may need to refer back to them during the school year.

The Bottom Line
Homeschooling is a large undertaking that requires time, effort and money upfront to ensure that your children are getting the best education possible. Effort spent to plan the lessons and the school year will be repaid in future years as you acquire more experience with the process.

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.