Avoiding Debt

Lesson Content

• Lesson Plan Template:

  CTE Lesson Plan

• CTE Course Info and Benchmark Notes

  
  

  Program Title: Finance

  Course Title: Personal Financial Literacy

  Course Number: 8500120

  Career Cluster: Finance

  CIP Number: 09200104PA

  Course Type: Non-Career Preparatory

  CTE Benchmark(s):

  09.07 Explain the alternatives to using consumer credit and to avoiding credit problems (i.e., cash, layaway, and planned savings for a large purchase).

  09.08 Identify ways to correct credit problems.

• Unit Outline

  
  

  This lesson is designed to be used with the case study, “A Journey to Becoming Debt Free.” See CPALMS resource ID# 209271.

• Career Connection

  
  

  In this lesson students will develop career building skills for researching, writing, teamwork, communication, and use of technology in a workplace setting. In addition, students will gain financial literacy skills in money management from conducting research on avoiding debt and appropriate/inappropriate use of credit cards.

• Learning Objectives

  
  

  Students will be able to:

  • Conduct research to identify different ways consumers can manage debt.
  • Explain how to use other available options before going into debt.
  • Write a summary about how to manage debt to avoid poor credit.

• Prior Knowledge

  
  

  Students should be able to:

  • Collaborate with a partner.
  • Utilize their researching skills to gather topic-based information.
  • Participate in an oral discussion with a willingness to learn.
  • Use technology appropriately.
  • Recognize the term, credit score (rating).

• Guiding Questions

  
  
  • How can individuals avoid credit debt?
  • How can consumers work to resolve credit problems?
  • What does research show are some options or strategies for maintaining a good financial status (rating)?

• Procedure

  
  
  1. To introduce the lesson, the teacher should engage the students prior knowledge by asking the question: Is 750 a good or poor credit score? Why or why not
     • Students may share their responses with the whole group.
  2. Distribute a copy of the case study, “A Journey to Becoming Debt Free,” (see CPALMS resource# 209271) for students to read and discuss the details with a partner.
     • For time management, set a timer for 5-10 minutes while students read silently and share thoughts.
     • Pose the following questions to students: What are some key terms or phrases that identifies Reneé has accumulated debt? Why did this happen? What will be the results of this occurrence? What happened because of this occurrence?
     • Have the students turn to their shoulder partner and share their thoughts about the case.
  3. Ask students the guiding questions to encourage discussion and choose pairs to share out.
     
     • How can individuals avoid credit debt?
     • How can consumers work to resolve credit problems?
     • What does research show are some options or strategies for maintaining a good financial status (rating)?
  4. Set the purpose of the lesson and organize students in small groups.
  5. Provide each group with a copy of the Cause-and-Effect Graphic Organizer handout (see attachment). Each student should now have the case study and one handout per group to proceed with the lesson.
     • Each group should select a member to fill in the graphic organizer with their responses to the proposed questions or statements about incurring debt as it relates to the case study.
     • One to two causes should be reflected and does not have to match the number of effects (i.e., 2 causes and 3 effects).
     • Other group members will verbally provide the details from the research to add to the graphic organizer.
     • Circulate the room while students are engaging in the activity providing feedback as needed.
  6. To continue the lesson, student pairs will research different ways consumers can use strategies to avoid incurring debt and to manage their finances appropriately. Using the research, add responses to the following questions on the chart on the back of the Cause-and-Effect Graphic Organizer (see attachments):
     • List online resources.
     • What causes debt? What are inappropriate ways to use credit cards?
     • As a result of debt, what happens to one's credit/credit score?
     • What are appropriate ways to use credit cards? What are strategies for avoiding debt?
     • Information needs to be paraphrased from the sources rather than copying and pasting into the graphic organizer. Remind students that paraphrasing is putting information into their own words.
  7. To bring the lesson to a close, students will use the graphic organizer to write and post a summary pretending that they run a financial advice column on an electronic discussion board, and someone has asked about strategies to avoid debt.
     • The response should clearly state strategies to avoid debt and manage personal finances.
     • An example using a real-life situation should be included in the summary.
     • Have students check their work for spelling, grammar, and punctuation before posting their answer to the advice column.

• Teacher Notes

  
  
  • Although a timer is suggested for reading the case study, it may be used throughout the lesson to keep students on task (i.e., completing the graphic organizer and researching).
  • The guided questions for completing the graphic organizer (See Procedure #2) can be written on the board or chart paper for the whole class to see.

• Optional

  
  

  Extension Idea:

  • Students can research what a household budget would look like and develop a sample of one for Reneé using sample figures.