Topic 7: Borrowing Money, Credit Cards and Loans

By the time they reach adulthood your kids should know…

  • The benefits of saving up to purchase the things they want
  • The cost of borrowed money
  • The different institutions from which they could borrow
  • The different credit products available
  • The difference between secured and unsecured credit
  • How repayments and interest work together as they pay off a loan
  • The reasons for the different fees and interest rates associated with different loans/credit facilities and the risks and dangers of each    ·        The difference between a Credit Card and a Debit Card
  • How a Credit Card works, i.e. what happens between making a purchase and making a payment?
  • How to read a Credit Card statement
  • When interest is charged on a Credit Card and why
  • How interest is calculated and charged with a Credit Card
  • How to look up their Credit Score
  • What information determines their Credit Score
  • How their Credit Score impacts their life
  • That just because they are offered finance it does not mean they can afford it or that it is in their best interest to accept it
  • How debt can cause stress, feelings of hopelessness and in extreme cases, can even lead to physical harm and crime.

Lower Primary School Years:

Suggestions:

Upper Primary School Years:

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Lower High School Years:

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Upper High School Years:

At this age it will be hard to teach the dangers of borrowing, credit and loans but you can start the learning through pocket money. If your child wants something and they don’t have enough pocket money this week you might give them an advance on the condition that they will not be getting pocket money next week. You must stick to that condition.

This may be particularly powerful if the child has siblings who DO get pocket money the next week. They will think twice the next time they want to spend money before it’s due.



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