- Single class period
Activity Two: Signs of debt
Debt is a sensitive topic, while it may not directly impact on you, you may need to support a friend/family member who is struggling with debt. In this lesson, students will work together to identify the signs to watch out for which would indicate that debt has become out of control.
Activity One: Review of Lesson Twelve Homework Task
1. Review the Lesson Twelve: Homework Task by inviting students to read their email to a friend, to whom they owe money.
2. Ask the class to identify strategies they think would most likely bring about a resolution of the situation.
3. Ask the class whether they found the homework task easy or difficult? Which, if any, aspects did they find difficult, and why?
Activity Two: Katie’s story
1. Explain to the class that debt can be a sensitive issue. Some people find themselves struggling with debt or are close to someone who is. Remind students out of control debt is almost always as a result of unexpected life changes.
2. Divide the class into pairs.
3. Distribute one copy of Student Worksheet: Katie’s story to each pair.
4. Invite each pair to come up with five things (actions/behaviours etc.) which indicate that Katie is in trouble with debt.
5. Take feedback from a sample of pairs, recording their responses on the white/blackboard. If students do not mention the following warning signs you could add them to the list on the white/blackboard:
- always late paying bills
- don’t know exactly how much they owe - just know that they can’t manage it
- using credit to pay for everyday expenses (e.g. food)
- borrowing more to pay loans/credit cards
- problems paying rent/mortgage
- ignoring or missing loan repayments
- having no savings at all for emergencies/unexpected expenses
6. Conclude by explaining to the class that when people are in real financial trouble it can be very stressful for them. This kind of stress can lead to bad decisions, because they are so worried and upset they can’t see a way out or a solution to their problems. However, it is really important to realise there are places you can go for help. For example, MABS (Money Advice and Budgeting Service) is a free service that gives confidential, one-to-one advice to people struggling with debt (see www.mabs.ie) and the CCPC website (www.consumerhelp.ie) has lots of useful tools to help people manage their money better.
Distribute one copy of Student Worksheet: Priority and secondary debts to each student.
Tell students that one of the first steps to getting out of trouble with debt is to make a list of all current debts – identify which ones are the most important. The most important debts are called ‘priority’ debts, whereas other debts are referred to as ‘secondary’ debts.
Priority debt: A debt that is more important than others. Because of the type of legal agreement (contract) you have with certain creditors they can take serious action if the debt is not paid on time (for example, they can take your property or cut off a service).
Secondary debt: These are debts where non-payment will not result in the loss of your home or essential goods and services. The people you owe the money to can take you to court to recover the debts, but you cannot be sent to prison for non-payment. However, secondary debts do need to be paid so you cannot ignore them.
Katie’s story can be used to list out what debts she has and identify which are priority debts and which are secondary debts.
NOTE: More information on priority and secondary debts is available at www.consumerhelp.ie/tackling-debt
The steps for reviewing this homework task are given at the start of Lesson Fourteen.