Borrowing Responsibly

45-minute agenda

1. 0–5 min

   Warm-up

   Post: “Before you borrow money for anything, what questions should you ask yourself? List as many as you can in two minutes.”

   Teacher note: Steer toward the lesson's four: Do I need it now? Can I afford the payments? What's the total cost? What if things change?

2. 5–12 min

   Direct instruction

   Present the lesson slides. Make sure students leave with these points:

   • Ask: need it now? Can I afford it? Total cost? What if things change?
   • DTI = monthly debt payments ÷ gross monthly income.
   • Avalanche saves the most money; snowball builds momentum.
   • Call your lender before you miss a payment.

   Use the “See it” slide (Avalanche vs. snowball) to make the idea visual.

3. 12–17 min

   Worked example

   Walk through “Two debts, one plan” on the slides. Pause before the result and ask students to predict it.

4. 17–22 min

   Live demo

   Project plan a payoff from the slides or the Credit Card Payoff Calculator. Change one input at a time and have students call out what they think will happen.

5. 22–34 min

   Avalanche vs. Snowball

   Format: pairs · 12 minutes

   1. Two debts: Card A has $600 at 15% APR (minimum $25). Card B has $2,400 at 24% APR (minimum $60). There's $250 a month for debt.
   2. Pairs decide which card gets the extra money under snowball (smallest balance first) and under avalanche (highest APR first).
   3. Share the results below and ask: which plan would you choose, and why?

   What to look for: Snowball (Card A first): debt-free in 1 year, 2 months, $453 interest, first card gone in month 4. Avalanche (Card B first): debt-free in 1 year, 2 months, $408 interest. Avalanche saves about $44; snowball gives a quicker first win.

6. 34–39 min

   Check for understanding

   Use the question slides — or run them as a Four Corners game. Answers:

   1. Using the avalanche method, which card gets your extra payments first? — B. Card A, because it has the higher APR
   2. What's your debt-to-income ratio? — C. 20%
   3. The snowball method always saves the most money. — False
   4. What's the best first step? — A. Call the lender now, before you miss it, and ask about options.
7. 39–42 min

   Discussion

   • Is student loan debt "good debt"? When might it not be?
   • Why do you think the snowball method works for so many people, even though it costs more?
8. 42–45 min

   Exit ticket

   Prompt: What should you do if you know you're going to miss a payment?

   Answer: Call the lender before the due date and ask about options, like a new due date or a payment plan.