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1 of 4 The Debt Snowball 4 Activity: Small groups of three to four students 30 MINUTES Material: Course materials and the activity handout Objectives. The purpose this activity for students to work together in order tomate and desia plan to help the persone out at det od start the STANDARD Credit and Debt Standard 3: Describe way to do correct credit problem Procedure Divide students into groups. Each group will need a copy of the student activity sheet, planning form and debt snowball form Encourage students to think creatively while laying out their plan. For example. their plan could include adjusting expenses (cutting cable decreasing food, etc). generating additional income, and proposing any realistic piece of advice that Dave teaches to help this person develop some "gazelle intensity, such as a garage sale. Review additional calculations, highlighted below, that students will need to do before they can start Current net income per month (80% of $40,000-to adjust for taxes-divided by 12 to get the monthly net) Total monthly expenses (add minimum payments and basic expenses) Interest rate (not necessary for the debt snowball, but it is listed in order for students to evaluate what information they need to use or ignore) House (listed as a debt but students should know that the house does not so into the debt snowball; see if students realize this on their own before calling attention to it) Remind them that it is important to stay focused and intense when it comes to getting out of debt. Current monthly expenses = $2,555 Monthly net $2,666 Answers Ideas to lower expenses or incre Answers will vary but migh lude getting an extra part-time job, dropping cable/satellite TV selling or no longer driving your car and using public transportation, if possible. Consumer could take 10 reduce better manage Foundation Personal Finance High School NAME DATE The Debt Snowball Directions Work with a group to evaluate the financial information listed below and create a plan to pay off the debt in the least amount of time possible using the debt snowball Use the planning form on the next page to help you come up with a plan. Do not start your delt snowball until you have discussed ideas with your group and agreed upon a course of action. Use the debt snowball forms, DEBT INTEREST RATE CURRENT BALANCE MINIMUM PAYMENT MasterCard 19.9% $600 $22 Visa 23.95% $2.545 $39 Car 4.8% $16.800 $465 Student Loan 6.8% $18.400 $220 Best Electronics 22.65% $1,015 $29 House 7.59 $124,878 $1,025 Additional Information: This person is single, a recent college graduate, and has no children, Gross Income: $40,000 Taxes: 20% of gross Monthly Expenses: $60 cell phone $65 electricity $45 cable TV $250 automobile fuel $85 insurance $250 food Hint: Consider increasing income or decreasing expenses as ways to generate incomi. Ideas to lower expenses or increase income might include getting an extra part-time job, dropping cable/ satellite TV, selling or no longer driving your car and using public transportation CHAPTER 4 For High School Edition 3 of 4 110 Debt Snowball 28 Student Planning Form Project Name: Current Monthly Income Ideas to Lower Expenses or Increase Income Monthly Expenses Proposed Monthly Income: Monthly Expenses Plan of Action: CHAPTER Foundations in Purnal Finance High School The Debt Snowball 13/3) Debt Snowball ITEM TOTAL PAYOFF MINIMUM PAYMENT NEW PAYMENT CHAPTER 4 Foundations in Personal Finance High School Edition 1 of 4 The Debt Snowball 4 Activity: Small groups of three to four students 30 MINUTES Material: Course materials and the activity handout Objectives. The purpose this activity for students to work together in order tomate and desia plan to help the persone out at det od start the STANDARD Credit and Debt Standard 3: Describe way to do correct credit problem Procedure Divide students into groups. Each group will need a copy of the student activity sheet, planning form and debt snowball form Encourage students to think creatively while laying out their plan. For example. their plan could include adjusting expenses (cutting cable decreasing food, etc). generating additional income, and proposing any realistic piece of advice that Dave teaches to help this person develop some "gazelle intensity, such as a garage sale. Review additional calculations, highlighted below, that students will need to do before they can start Current net income per month (80% of $40,000-to adjust for taxes-divided by 12 to get the monthly net) Total monthly expenses (add minimum payments and basic expenses) Interest rate (not necessary for the debt snowball, but it is listed in order for students to evaluate what information they need to use or ignore) House (listed as a debt but students should know that the house does not so into the debt snowball; see if students realize this on their own before calling attention to it) Remind them that it is important to stay focused and intense when it comes to getting out of debt. Current monthly expenses = $2,555 Monthly net $2,666 Answers Ideas to lower expenses or incre Answers will vary but migh lude getting an extra part-time job, dropping cable/satellite TV selling or no longer driving your car and using public transportation, if possible. Consumer could take 10 reduce better manage Foundation Personal Finance High School NAME DATE The Debt Snowball Directions Work with a group to evaluate the financial information listed below and create a plan to pay off the debt in the least amount of time possible using the debt snowball Use the planning form on the next page to help you come up with a plan. Do not start your delt snowball until you have discussed ideas with your group and agreed upon a course of action. Use the debt snowball forms, DEBT INTEREST RATE CURRENT BALANCE MINIMUM PAYMENT MasterCard 19.9% $600 $22 Visa 23.95% $2.545 $39 Car 4.8% $16.800 $465 Student Loan 6.8% $18.400 $220 Best Electronics 22.65% $1,015 $29 House 7.59 $124,878 $1,025 Additional Information: This person is single, a recent college graduate, and has no children, Gross Income: $40,000 Taxes: 20% of gross Monthly Expenses: $60 cell phone $65 electricity $45 cable TV $250 automobile fuel $85 insurance $250 food Hint: Consider increasing income or decreasing expenses as ways to generate incomi. Ideas to lower expenses or increase income might include getting an extra part-time job, dropping cable/ satellite TV, selling or no longer driving your car and using public transportation CHAPTER 4 For High School Edition 3 of 4 110 Debt Snowball 28 Student Planning Form Project Name: Current Monthly Income Ideas to Lower Expenses or Increase Income Monthly Expenses Proposed Monthly Income: Monthly Expenses Plan of Action: CHAPTER Foundations in Purnal Finance High School The Debt Snowball 13/3) Debt Snowball ITEM TOTAL PAYOFF MINIMUM PAYMENT NEW PAYMENT CHAPTER 4 Foundations in Personal Finance High School Edition