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|Discover |Gather |Process |Performance Assessment Tasks: |
|Learning Objectives |Articles by Dave|Bloom’s |1. Active Read to Learn Strategies |
| |Ramsey .com |Taxonomy |2. Active Listen to Learn Strategies |
| | | |3. Active Build Higher Level Thinking Strategies |
| | | |Article #1, Truth About Credit Card Debt |
|1. Identify the |Article #1 |Read and |Timeline |
|advantages of using |The Truth |Evaluate |Explain: how this article may personally apply to your real-life circumstance |
|credit |About Credit |Article | |
| |Card Debt | |1. Today |
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| | | |2. Graduation day |
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| | | |3. Two-years after graduation |
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| | | |Article #2, Shocking Reality of High Schoolers |
|2. Identify the |Article #2 | |Identify Positives |
|various costs related|The Shocking |Read and |Identify Negatives |
|to credit |Reality of High |Evaluate | |
| |Schoolers |Article | |
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| |Article #3 | | |
| |The Truth About | | |
| |Teens and Credit| | |
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| | | |Article #3, Truth about Teens and Credit Cards |
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| | | |Identify Positives |
| | | |Identify Negatives |
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| | | |Article #4, Build Credit Without Credit Top 3 Questions |
|3. Compare common |Article #4 | |Identify Positives |
|sources for building |Build Credit |Read and |Identify Negatives |
|credit |Without Credit: |Evaluate | |
| |Your Top 3 |Article | |
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| | | |Article #5, The Number One Way to Improve Credit Score |
|4. Discuss the |Article #5 | |Identify Positives |
|factors to consider |The Number-One |Read and |Identify Negatives |
|to establish credit |Way to Improve |Evaluate | |
| |Your Credit |Article | |
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|Apply Phase: Reflection Questions |
|1. What will you consider before | |
|attempting to obtain credit? | |
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|2. What credit circumstances are you | |
|experiencing in your daily life? | |
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|3. What else is done with this knowledge | |
|that you can try? | |
ARTICLE #1
The Truth About Credit Card Debt
from on 04 Aug 2009
Myth: Aren't there positive uses of a credit card? Like rebates and airline miles?
Truth: Responsible use of a credit card does not exist. Credit card debt is a major problem in America.
There is no positive side to credit card use. You will spend more if you use credit cards. Even by paying the bills on time, you are not beating the system! But most families don't pay on time. The average family today carries $8,000 in credit card debt according to the American Bankers' Association.
Now let's talk about the rebates. If you were using a credit card at 5%, you would have had to have spent $80,000 to get $4,000 rebates on new cars that lost $6,000 of value when you drove them off the lot. That is not a good deal!
Cash vs. Credit Cards
When you pay cash, you can "feel" the money leaving you. This is not true with credit cards. Flipping a credit card up on a counter registers nothing emotionally. A study of credit card use at McDonald’s found that people spent 47% more when using credit instead of cash. This is money you could have saved!
If you "have to" use plastic, I suggest a debit card. I use them for travel and the occasional convenience of ordering something over the Internet or phone. Other than that, I use cash.
Personal finance is 80% behavior. You need to cut out habits that make you spend more. You do not build wealth with credit cards. Use common sense. When you play with a multi-billion dollar industry and you think you're going to win at their game, you are naive. You cannot beat the credit card companies.
ARTICLE #2
The Shocking Reality of High Schoolers
from on 03 Aug 2009
Before you send your child off to the mall with a credit card, read this.
High school students are graduating without knowing how to balance a checkbook, how to live within their means, or how to save for the future. Why? Because no one is teaching them! You can't graduate without knowing what an amoeba is, but the basic life skill of how to handle money is not required. This is absolutely insane!
Credit card companies aren't just going after college students anymore; high school students are the new target. According to Norma Mendoza, a researcher at the University of Arkansas, several studies found that patterns of compulsive buying start during adolescence. Teens are the perfect vulnerable audience for credit card companies to sink their claws into.
Reality Sets In
This is the reality of many teens in your households, schools, churches, and communities:*
• 31% of students don't worry about their debt
• 6.9% of high school seniors scored a grade of "C" or higher in a 2005 financial literacy survey
• 74% of college students owned at least one credit card
• 19% of young adults admit having their phones, cable, or utilities cut off because they didn't pay their bills
• 15% of young adults have had their credit revoked
After high school, most teens head to college and are approached with credit card offers the moment they set foot on campus. More and more, the credit card companies are willing to open a line of credit for teens without any credit history or employment..
ARTICLE #3
The Truth About Teens and Credit Cards
from on 03 Aug 2009
Myth: Make sure your teenager gets a credit card so he or she will learn to be responsible with money.
Truth: Getting a credit card for your teenager is an excellent way to teach him or her to be financially irresponsible. That's why teens are now the number-one target of credit card companies.
Over 80% of graduating college seniors have credit card debt before they even have a job! The credit card marketers have done such a thorough job that a credit card is seen as a rite of passage into adulthood. American teens view themselves as adults if they have a credit card, a cell phone and a driver's license. Sadly, none of these "accomplishments" are in any way associated with real adulthood.
You are not teaching your 16-year-old child to spend responsibly when you give him or her a credit card any more than you are teaching gun responsibility by letting him sleep with a loaded automatic weapon with the safety off. In both cases, you as a parent are being stupid. People with common sense don't give 16-year-olds beer to teach them how to hold their liquor. By giving a teenager a credit card, the parent—the one with supposed credibility—introduces a financially harmful substance and endorses its use, which is dumb but unfortunately very normal in today's families. Parents must instead teach the teenager to just say NO.
Pouncing on the College Prey
Anyone visiting a college campus in recent years has been shocked at the aggressive and senseless marketing of credit cards to people who don't have jobs. The results can be devastating. Recently, two college students in Oklahoma gave up on their credit card debt and committed suicide with the bills lying on the bed beside them.
Vince called my radio show with a problem that has become a trend. Vince signed up for multiple cards during his sophomore year at college to get the free campus t-shirt. He wasn't going to use the cards unless there was an emergency, but there was an "emergency" every week, and soon he was $15,000 in debt. He couldn't make the payments, so he quit school to get a job. The problem was, without his degree, his earnings were minimal. Worse than that, he also had $27,000 in student loans. Student loans aren't payable while you are in school, but when you leave school by graduating or quitting, the payments begin.
Vince was one scared 21-year-old with $42,000 in debt but making only $15,000 per year. What's scary is that Vince is "normal." The American Bankruptcy Institute reveals that 19% of the people who filed for bankruptcy last year were college students. That means one in five bankruptcy filings were by very young people who started their lives as financial failures. Do you still think it is wise to give a teen a card? I hope not
ARTICLE #4
Build Credit Without Credit: Your Top 3 Questions Answered
How to establish your credibility in a credit-based world
from on 10 Aug 2012
Some people seem to believe that the credit score is almost as important as oxygen and water. Most of that stems from the fact that we’ve been beaten over the head with the importance of the credit score since we first learned the difference between a $10 bill and a $5 bill.
But it’s simply not true. Can you really live without a credit score? Absolutely—and it’s actually easier than you’d think. It just takes some foresight, planning and maybe a little patience.
The credit score myth is tangled up in almost every part of our financial lives, but there are a few areas that seem to come up over and over again. So, here are the top three questions we get about how to live without a credit score:
How do I rent an apartment?
Most apartments will work with you if you can provide first and last month’s rent, as well as a security deposit. Ask them up front about their process and what type of information they’ll need. If they want a credit score and you don’t have one, simply tell them that you’ve never gone into debt and you use cash. Get a rental history referral from your previous landlord. If it’s your first time renting, you might have to look around for a little bit. But you’ll be able to find someone to work with you.
How do I take out a mortgage?
If you don’t have a credit score, you should focus on one thing—making sure you have a large down payment. If you’ve never gone into debt, that shouldn’t be too difficult, right? Without a credit score, the down payment, as well as your job and how long you’ve been employed in that line of work, are big factors.
You’ll also want an outstanding history of rental and utility payments. Look for a mortgage company that uses a process called manual underwriting, sometimes called “non-traditional credit” or “no credit score” lending. And whatever you do, don’t buy a house until you’re ready. That means you’re out of debt, you have a 3–6-month emergency fund, and you have a good down payment. Of course, you could always just pay cash for a house!
What if an employer wants to see my credit score during the interview process?
This is a growing trend, but it mainly affects people in the financial industry—banks, mortgage brokers, investment companies and so on. Again, the key here is to learn their process up front and explain why you don’t have a credit score if they ask you about it.
Remember, these answers only apply if you have no credit score. If you have a bad credit score, that’s a different situation entirely.
For renting, offer to put an extra month down if you are getting resistance from the property manager because of a bad score. For a mortgage, be patient, rent for a while, and save up even more to put into a down payment.
Our culture will tell you otherwise, but it is possible to live without a credit score. Sure, sometimes it might be annoying because of the way so many people have become addicted to the credit score. But seriously, it will never be as annoying as having a huge pile of debt!
Tired of putting up with FICO? Have you considered how different your life story could be without it? Check out these stories from people like you who are changing their lives by making the decision to live without debt!
ARTICLE #5
The Number-One Way to Improve Your Credit Score
Guess what? We know a very simple way to improve your credit score—one that has nothing to do with paying your debts on time.
After you have worked your way through the debt snowball and become debt-free, your FICO score drops. And drops. And drops some more. Why? Because you’re out of debt! That’s the result of not having any debts to pay. It won’t be long until the score is as gone as free time after you have a child.
You may not think of that as “improving” your score. Doesn’t improving something mean it goes up? In most cases, yes. But that’s not the case here for one reason: Your credit bureau report score does not mean that you are winning with money. Not even close. It’s just a measure of how good you are at spending with debt. So the number-one way to improve your “I love debt” score is to get out of debt!
Don’t believe us?
Take a look at this. Here’s what makes up your credit score:
• 35% of the score is based on your payment history.
• 30% is based on your debt level.
• 15% is the length of time you’re in debt.
• 10% is new debt.
• 10% is the type of debt.
You don’t see anything in there about how much money is in your bank account. There’s no mention of your monthly budget or any cash you have saved for emergencies and retirement. The score is just about how much debt you have, what kind, how long you’ve had it, and how you’ve paid on it. Anyone can borrow money and end up with a good credit score. It’s nothing special.
To put it another way, let’s say you inherited $10 million from a long-lost relative then got a $200,000-a-year job the day after that. Would that help your money situation? Absolutely! But your credit score wouldn’t change one point.
As you stay away from borrowing money, your credit score will gradually shrink. That makes some people nervous, but don’t let it bug you. Staying away from debt means you are finding other ways to pay for stuff and saying no to what you can’t afford. As a result, your wealth will grow through saving and investing.
Over time, growing your wealth and eliminating your debt will mean you have a lot of money and not a lot of bills. By then, your FICO score will be just about gone. But who cares? You’ll have serious cash stocked up. And it’s a lot better to have a high bank account balance than a high credit score!
Wouldn’t it be awesome not to worry about your credit score? Doing a budget is where you start to make that happen. Check out our free download, Dave Ramsey's Guide to Budgeting, one of the most comprehensive guides we’ve compiled on the subject to date. From budgeting to using the envelope system and juggling paycheck frequency, you’ll find it here.
Change your family tree today—get started on your budget.
Self-Paced Performance Assessment Task Scoring Guide
|Task: Document achievement of lesson competency |
|Condition: Lesson Period Timeframe (Less Than 90 minutes) |
|Standard: See below criteria and next page criteria |
Lesson Competency: Appraise personal credit worthiness
Directions Add this performance assessment task to your Cadet Portfolio TAB 3
|Standard |
|Criteria. |
|Ratings |
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|1. Document achievement of lesson competency in *Lesson Timeframe |
|Met Not Met |
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|2. Type name and date |
|Met Not Met |
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|3. Type lesson competency |
|Met Not Met |
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|4. Type and number each criteria under lesson competency |
|Met Not Met |
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|5. Type and number your response under each criteria |
|Met Not Met |
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|6. Core ability: Apply critical thinking techniques |
|Met Not Met |
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|7. Core ability: Take responsibility for your actions and choices |
|Met Not Met |
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|8. Core ability: Build your capacity for life-long learning |
|Met Not Met |
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|9. Core ability: Treat self and others with respect |
|Met Not Met |
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|10. Core ability: Communicate using verbal, non-verbal, visual and written techniques |
|Met Not Met |
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|Criteria for Effectiveness |
|Grade |
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|1. Rating = met 10 criteria and met *Lesson Timeframe (90 minute) |
|10 Points = Green |
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|2. Rating = met 10 criteria but not met Lesson Timeframe |
|6 Points = Yellow |
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|3. Rating = met 9 or less criteria |
|0 Points = Red |
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|1. *Lesson Timeframe = date of lesson and timeframe lesson taught. |
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|2. For student who is absent from class, * Lesson Timeframe = date self-paced learning experience handed to student plus 4-days for |
|completion. |
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