Jan 27, 2021

Question of the Day: How many Americans could not pay a surprise $1,000 bill using their savings account?

Answer: 38% (Charging a credit card and pay over time, borrowing from a friend/family member, or taking out a personal loan)

Questions:

  1. Are you surprised by this number? Why or why not?

  2. What are some surprise expenses that could amount to $1000? What are some surprise expenses that cost more than $1000? 

  3. Between charging a credit card, borrowing from a friend, or taking a personal loan, what option is most costly? Why?

Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom.

 

Behind the numbers (Bankrate):

"For adults who would need to borrow to cover a $1,000 emergency, the most common option is putting the expense on a credit card now and dealing with the financial consequences later. A credit card debt was the preferred payment method for 18 percent of Americans.

However, going into debt to deal with a rainy day is expensive. Even as interest rates have plunged on other types of debt, the average interest rate on a credit card remains north of 16 percent, according to Bankrate’s national survey of lenders.

If you don’t pay off that surprise expense quickly, credit card finance charges can add hundreds of dollars to the cost of that mechanic’s bill or hospital visit."

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Your students can play NGPF Arcade Game Spent to experience what it means to live "paycheck to paycheck" and one unexpected expense away from financial difficulties. 

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About the Author

Mason Butts

After graduating from UCLA with a Master's in Education, Mason spent 5 years as a science educator in a South Los Angeles public high school. He is committed to supporting the holistic growth of all students and empowering them to live a life of relational, academic, and financial success. Now settled in the Bay Area, Mason enjoys facilitating professional developments and partnering with educators as they prepare students for a bright financial future. When Mason is not building curriculum or planning a training, he can be found cycling, trying new foods, and exploring the outdoors.

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