Year 9 - Citizenship
What are the implications of borrowing money?
How can we manage money well?
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This pupil-friendly study guide includes a unit summary, clear notes, common mistakes, and quick questions with answers.
Unit Summary
Pupils explore how to look after their money considering the implications of borrowing, how they can keep track of their money, what saving options are available to them and what their rights are as a consumer.
Lesson Summary
You will learn to explain the different types of borrowing and the dangers attached to borrowing.
Key Notes
- Borrowing money through credit cards can lead to high interest rates.
- Short-term loans can quickly accumulate debt and become expensive.
- Long-term loans can result in paying more interest over time.
- Overdrafts can lead to high fees if not repaid quickly.
- Loan sharks charge extremely high interest rates and operate outside FCA protections.
Vocabulary To Learn
- borrow: taking money from a lender with the intention of paying it back
- interest: the extra money you have to pay when you borrow money, acts as a fee for using it
- overdraft: when you spend more money than you have from your bank account
- loan: a sum of money you receive and agree to pay back with interest
Common Mistakes To Avoid
- Borrowing money is always a dangerous thing to do.
3 Quick Questions (With Answers)
1. Explain the lesson in two key points.
Borrowing money through credit cards can lead to high interest rates. Short-term loans can quickly accumulate debt and become expensive.
2. What does this key word mean in this lesson? 'borrow'
taking money from a lender with the intention of paying it back.
3. Correct this common mistake.
Mistake: Borrowing money is always a dangerous thing to do. Correction: In our lives it is sometimes necessary to borrow money, e.g., when we buy a house most people have to get a mortgage. However, this can be part of budgeting sensibly and learning to be financially responsible by always paying loans back on time.
More Lessons In This Unit
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