Introduction

Lee is the breadwinner for his family of four. His wife, Kristy is in her final year of nursing school, and their two children are in elementary school. Six months ago Lee was laid off from his job at the factory. They had a small emergency fund, but it's been gone for a few months. Lee has just now been hired at a new factory and they will pay him more money than he made before!

However, Lee hasn't been able to make the mortgage payment on the family home for three months, and he received a notice yesterday that he 10 days to make his payments current or the bank will begin the process of foreclosure. Unfortunately he won't get his first paycheck at his new job for 15 days.

Lee's friend Brad suggests that he go to a Payday Lender and get an advance on his paycheck. He can then pay them back once he gets paid. Really? They can do that? What's the catch?

In this lesson, you will discover other types of credit that exist, and dangers that come along with them.

payday loan

Lesson Objectives

Following successful completion of this lesson, students will be able to...

  • Describe various types of high-interest loans.

Enduring Understandings

  • Proper management of money is essential to personal financial stability and success.
  • There are good and bad uses of credit.
  • Credit is an essential tool used to establish financial independence, however there are costs associated with the use of credit.

The above objectives correspond with the Alabama Course of Study: Career Preparedness standard: 21c

This lesson incorporates the following Literacy Standards: R1, R2, R3, R4, R5, R6, R7, R10, W1, W2, W3, W4, W6, W8, W9, and W10

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