• To state and explain some of the reasons why young people are likely to get into debt e.g. poverty, low incomes, tempting offers e.g. 0% finance on goods purchased, discounts offered by store cards etc.
• To look at how and why debt is also a major problem for students in FE and higher education.
• To define and explain the term ‘debt spiral’.
• To discuss different ways to borrow money and to identify the strengths and weaknesses of different methods and to identify and explain the consequences of not being in a position to pay back money borrowed.

2) Instructions

Class discussion – How can you borrow money

1. Class discussion – How can you borrow money
a. Bank – mortgage
b. Bank – Personal loan
c. Building Society – mortgage
d. Building Society – personal loan
e. Store cards
f. Loan companies –secured loan
g. Personal loan companies (unsecured)
h. Visa cards /Credit cards
i. Parents
2. Get the class to look through brochures and leaflets from banks, loan companies, building societies etc. for inspiration
3. Write their ideas on the board

Strengths and weaknesses of different borrowing methods

4. On a chart below, invite the class to come up with strengths and weaknesses of each of the below:

	Strengths	Weaknesses
Bank – mortgage
Bank – Personal loan
Building Society – mortgage
Building Society – personal loan
Store cards
Loan companies –secured loan
Personal loan companies (unsecured)
Visa cards /Credit cards
Parents



5. Be prepared to share decisions with the rest of the class

Group discussion - what happens if you can’t pay?

6. Whole group discussion – ask the class to what happens if you can’t pay?
7. Consider the different consequences of not being able to pay back money borrowed.
a. the requirements to be given pocket money,
b. the sanctions if these requirements are not met, and the rewards for saving money.
8. Invite the children to discuss what should be included
9. Write the final agreement on the board

Creating a debt spiral poster

1. Create a poster to show how things can spiral out of control
2. The class draw a large spiral on sugar paper and then mark out the steps e.g.:
a. You cannot pay back your parents,
b. So you take money out of the bank,
c. So you cannot meet payments on your agreed overdraft,
d. So you exceed the agreed amount,
e. So you are charged increasing amounts of interest,
f. So you borrow money on a secured (or unsecured) loan (consider interest rates),
g. You fail to meet those payments (back up to c. thus the Debt Spiral).
3. Allow the class to cut out images from brochures and leaflets from banks, loan companies, building societies etc. to illustrate the spiral.

3) Resources

• Brochures and leaflets from banks, loan companies, building societies etc.
• Sugar paper for drawing the debt spiral

4) Key Vocabulary

• Debt
• Mortgage
• Personal loan
• Store card
• Credit card
• Secured loan
• Unsecured loan
• Debt spiral

5) Cross Curricular links

• read relevant material
• identify accurately the main points and ideas
• use the information to suit your purpose.
• present relevant information in a format that suits your purpose
• spell, punctuate and use grammar accurately
• make your meaning clear.

• obtain the information you need to meet the purpose of your task
• identify suitable calculations to get the results you need.
• carry out calculations to the levels of accuracy you have been given
• check your results make sense.
• choose suitable ways to present your findings
• use more than one way of presenting your findings
• present your findings clearly using a chart or diagram
• describe what your results tell you.

Key Skills ICT Level 1

• choose information that is relevant to your tasks
• enter information using formats that help development
• save information so it can be found easily.
• use appropriate layouts for presenting information in a consistent way.