"We play all day, and they learn like crazy."
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Oh, I'm going to start using this. My current go to response is that we're eclectic homeschoolers, and if people ask more questions I might say we learn primary through experiences or it's based on the needs of each individual kid. These have worked great for strangers, but I think saying we play all day and learn like crazy would be great for my kids to hear me talking about. My 14 year old has always been rather critical of how unschooling. She's told people in the past that we don't do anything. She's in school by her choice right now, and doing well academically. One of her teachers told me "Whatever you did, it WORKED." So, I definitely need an explanation that will help the kids understand it better themselves, I think.
Regarding grandparents, I was homeschooled myself and very vocal about homeschooling then-future grandchildren, so it wasn't a big surprise for the in-laws once the kids actually hit school age. My mother-in-law currently keeps quizzing my seven-year-old on money denominations. It irks me, and drives my husband crazy. We've talked to our son about it and he says he doesn't mind because his grandma gives him the coins after. So we try to recognize that his relationship with her and his perception of "schooly things" is different than ours.