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HSFPP Stories of Impact

Cost of Borrowing Activity Prompts Student to Change Prom Spending Plan

HSFPP Stories of Impact

real teachers real stories

by Brad Baker, Social Studies, Wake Forest, N.C.

We were going over lesson 2-1 using credit. We read about Mairah and Jesse, completed the siren song of borrowing and had discussed the stop, drop and think as a class. We covered this unit during prom season, so I created an activity where students had to buy a prom dress, rent a limo and choose a restaurant. They would put what they spent on a credit card. After they added up the cost we used a minimum payment calculator to see how long it would take to pay back and how much interest they would pay. Most students were shocked at how long it was going to take to pay back $600 and how much interest they were going to pay if they paid the minimum each month. A couple of days later one student came to my room after school and told she was going to prom and she had a brand new dress picked out to buy. She did not have the money so she was going to have to use credit. But after our lesson on credit she saw how much time and money the dress was actually going to cost. She changed her mind. She had a discussion with her mom and they decided to look at less expensive dresses online and in second-hand shops. They found one in a shop downtown that was a fraction of the price. With the new price they could afford to pay in cash and not credit. She even convinced her boyfriend not to rent a limo but drive his car so he could save money. I was really impressed that this young lady would take what she learned from Module 2-Borrowing and apply it to her life at that moment. I knew that she was well on her way to becoming financially literate when she chose reducing her spending, not using credit and considered prom to be a want rather than a need. Most students go all out for prom and not think about the financial consequences.