The challenge
Hi guys, I'm Gail Chapman. I'm a content creator and brand consultant in the food industry. I also run my own website where I work with lots of big brands, blogging on Instagram and also on TikTok. I really enjoy cooking, and as you can see from my socials, there is nothing I love more than having a dinner party for my friends, making lots of delicious food, and creating a great vibe.
So I thought today you could work in teams to plan a special celebration meal for one of your family or friends. You will need to factor in the cost of everything that you need to make it the best celebration that it can be. However, you're not gonna have enough money to pay for everything upfront. I want you to consider all of the options that are available and pick the one that's most appropriate.
Bank accounts come with a debit card that allows you to take money out at cash points as well as pay for things online. Your debit card uses money that is in your bank account. For this challenge, you have two hundred pounds in your bank account to pay for the party. With a debit card, you aren't borrowing any money to pay for your items.
Credit is a buy now and pay later option. A credit card allows you to pay for goods by borrowing money from a credit card provider. The credit card provider will charge you interest to do so. The rate of interest is called APR or Annual Percentage Rate. If the APR is eighteen percent and you borrow one hundred pounds, you would pay back a hundred and eighteen pounds after a year. The quicker you pay off a credit card, the less interest you'll have to pay.
Applying for a credit card can take a small amount of time, and you might have to wait for the card to come through. But there are other options when buying things online, such as individual store cards or buy it now, pay later options. The amount of APR that you'll be charged can vary from lender to lender, so make sure you look carefully at how much you will be paying back in the long term. Think really carefully before getting into any debt and make sure you can afford the repayments.
In a moment, you'll break into groups to plan your celebratory meal. It can be for a birthday or any celebration you decide. You'll need to consider food and drink, entertainment, venue hire, and decorations. You'll have to buy some items on credit. Which option of credit you choose and why will have to be considered from those presented to you. You'll need to work out not only the cost of the party but the cost of the interest on the credit and how long it'll take you to pay it back.
It's time for the challenge now. Get creative and think outside the box, and in thirty minutes, we'll regroup. I'll be back on another video to talk about how you could have gone about it.
Video summary
Food vlogger Gayle Chapman explains how when you borrow money from a bank or building society, they charge interest (money you pay back on top of what you've borrowed). What it costs depends on the interest rate and how long you take to pay back your debt.
There are other forms of borrowing too; overdrafts, credit cards, student loans and mortgages. 'Payday' loans can have sky-high interest rates.
Lenders check your payment history to see if you'll be able to pay the money back. So, if you need a loan, make sure you have a plan for how to repay it.
Challenge round-up
Gayle Chapman summarises the key considerations for the challenge.
Hi guys welcome back. Did you manage to navigate the world of credit to organise your party? Here are some things you might have considered. Could you have bulk bought the food at a discounted rate? Or made it yourself to avoid spending more money? Could you have made the decorations from things you already had at home? Or instead of hiring a DJ, could you have used your own playlist?
What credit option did you choose? A credit card might have taken longer to come, but it might have given you longer to pay off your credit and at a better rate. It might have even given you an interest-free period. Did you consider how you would pay back the money? Having a plan before you borrow is super important to avoid getting into debt. Be honest with yourself about how badly you need to make the purchase and how you'll make those repayments. Some lenders have very high interest rates, and falling behind in payments can cause you big financial problems in the future.
In day-to-day life, lots of things need to be budgeted for. In this case, smart money management helps you not spend what you can't afford. Hopefully, today's session will have given you some food for thought when it comes to thinking about how you can spend your money more carefully.
That brings us to the end of our financial session. I hope you've enjoyed it. Thanks and see you soon.
Teacher notes
Watch the video and then split the class into pairs or groups to work on the task set in Part 1 of the film. After the activity time has passed re-group and watch Part 2 of the video to see how Gayle would have gone about things.
Choose from a selection of activities to help students learn more about credit and debt.
Before watching
Questions to get the class thinking and talking:
- What is debt?
- What is credit?
- What should you consider before borrowing money?
Establish 'debt' is money you owe and 'credit' money you borrow. Before you borrow money, you should know how much you'll have to pay back, how you'll afford it and when you'll have to do it.
Using the film
You may wish to play the films twice: once straight through and once with pauses, to take students' comments and questions. Encourage the students to make notes as they watch.
After watching
Role-play - Ask the students why they might 'ask for credit' (apply for a loan). The class could list reasons. Point out store cards and mobile phone contracts are credit agreements.
Invite several students to play the role of someone approaching a bank to borrow £1,000. (You will take the role of bank manager!)Interview each applicant, asking questions such as:
- Why do you need this loan?
- Have you considered the alternatives?
- Are you employed?
- What is your monthly income?
- What are your outgoings?
- How long a period do you want the loan to run?
- What is your credit history like?
- Can you supply documents to support your application? (e.g., bank statements, payslips)
Activity ideas
- Glossaries - Students could compile glossaries of financial terms used in the film clip, along with their own definitions. This encourages them to clarify their understanding of key vocabulary.
Terms might include: 'credit', 'debt', 'interest', 'interest rate', 'Annual Percentage Rate (APR)', 'overdraft', 'loan'.
- Missing word puzzles - On the blackboard or onscreen, display the following paragraph, with the words in brackets missing. Ask students to fill the gaps.
An overdraft is short-term borrowing, best used for emergencies. The bank charges interest AND a daily, weekly or monthly fee. Spend more than you have in the bank without their permission and this unauthorised overdraft will cost you a LOT more. If you're about to go overdrawn, talk to your bank and agree a cheaper authorised overdraft.
Ask students to devise similar missing-word puzzles about other forms of borrowing.
- Ask students to consider why it might be easy to get into debt. Consider researching all the different ways there are to borrow money from bank loans to credit cards to online ‘pay in three’ platforms that appear on websites. Ask them to research what support is available and how to go about getting yourself out of debt.
Point out that, even if the APR and monthly payments seem low, when a loan runs for a long time it ends up costing a lot to borrow a little.
Invite each pair of students to draw leaflets advertising three different ways to get support for debt and/or to help get out of debt, or how to avoid getting into debt in the first place.
- Alternatives - Ask the question 'are there alternatives to borrowing money?' The class could list suggestions, such as: 'save up, wait until you've been paid, cut back on other spending, do some overtime, sell something to raise the cash, choose a cheaper item, or consider if you really need to buy something at all.'
Supported learning and SEN
Students could (with any necessary support) take a screengrab from Gayle Chapman’s film and add their own speech bubble, e.g., 'tell the bank before you go overdrawn'. A collection of 'Gayle says' captures and captions could form a financial education comic strip.
Closing the lesson
Ask students to try out their missing-word puzzles on the class.
This is a fun and snappy way to revisit the lesson material, reinforce the learning and check the students' understanding.
Follow-up task
Ask the class to research online the differences between credit and debit cards. Students could draw up a table comparing the two types of card.
This short film meets and extends curriculum requirements for financial literacy at:
- Key Stage 3 and Key Stage 4 in England (Citizenship and Personal, Social, Health and Economic Education)
- Wales (Mathematical Development and Personal and Social Education)
- Northern Ireland (Mathematics and Numeracy and Learning For Life and Work)
- Third and Fourth Level and the Senior Phase in Scotland (Mathematics and Numeracy, Social Studies and Learning, Life and Work).
Where next?
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Long-term saving challenge with Iona Bain. video
Financial journalist and author Iona Bain explains the importance of saving and sets a long-term saving challenge.
Sticking to a budget challenge with Liam MacDevitt. video
Former professional footballer Liam MacDevitt sets students a challenge to plan and stick to a budget ahead of a trip with friends to a football match.
Iona Bain's money jargon busters. video
In these short videos for secondary schools Morning Live's financial expert Iona Bain clearly explains pensions, mortgages, inflation, interest rates, credit and pensions.
Financial literacy with Steph McGovern. collection
In these short films for secondary schools Steph McGovern breaks down some key areas of study for the topic of financial literacy. These four short films will provide secondary students with a good understanding of credit, debt, pensions and how interest and taxation works.
