Loan zone

Before you begin

• Use the safety checklist to help you plan and risk assess your activity. There’s also more guidance to help you carry out your risk assessment, including examples.
• Make sure all young people and adults involved in the activity know how to take part safely.
• Make sure you’ll have enough adult helpers. You may need some parents and carers to help.

Planning and setting up the activity

• Set up five stations. Each station needs a challenge to complete and a scenario to collect when the challenge has been completed.
• Print out copies of the ‘Loan scenarios’ worksheet, with one pack per team.

Talking about debt 

1. Get into small groups.
2. Ask if anyone knows what debt is. Explain that debt is when you owe money to someone, a bank, or a company. Some key words to know are:
   
   • Credit: A promise to pay someone later. Some “buy now, pay later” credit schemes you may have heard of are PayPal, Klarna, and ClearPay.
   • Credit cards: A bank card that allows you to buy goods and services and pay later. You may have to pay interest on top of what you already owe if you do not repay on time.
   • Loan: Something you borrow, especially a sum of money that is expected to be paid back with interest.
   • Mortgage: A long-term loan to buy a house, flat, building, or land.
   • APR (Annual Percentage Rate): The yearly interest a person or company will pay on borrowed money.
   • Interest: Either the extra amount you pay when borrowing money, or the money a bank pays you for saving with them.
   • Interest rate: The extra percentage you pay on borrowed money.
3. Ask everyone why people might get into debt. Sometimes people need money to buy something quickly, such as fixing a broken oven, but know they can repay it. This is manageable debt, as it helps in the future and is affordable.
4. Other times, people borrow money for things they don’t need, like a holiday or designer trainers they cannot afford. This is unmanageable debt, as they may struggle to pay it back.
5. Ask everyone to think of an example of manageable and unmanageable debt. Examples:

• • Manageable: Buying a basic bike to get to a Saturday job and paying it back at an affordable rate.
  • Unmanageable: Buying the latest video game with money you don’t have.

Run the activity

1. Explain to everyone that in they’ll complete five stations in their teams.
2. At each station, they will complete a challenge and collect a loan scenario card.
3. Teams continue until they have completed all five stations and collected all five cards.
4. Once all cards are collected, teams should discuss each scenario and decide whether it represents manageable or unmanageable debt. (Some discussion prompts are provided at the bottom of the page.)
5. When everyone is ready, each group should start at their first station and continue until all stations are completed.
6. After finishing the scenarios, give the groups time to chat about each one. They can note down or draw their answers.
7. Next, come back together as a whole group and discuss each scenario and what the groups thought.
8. Ask everyone to reflect on what they have just learned and consider what they would teach someone else about manageable and unmanageable debt.

Designing an activity for younger sections

1. Each group should create an activity to run for a younger section, such as for the Beavers Money Skills or Cubs Money Skills. They should consider:

• • What experience of borrowing, loans, or debt the age group might have.
  • How to make it relevant to the age group.
  • Whether it can be based on another game (e.g., What Time Is It, Mr Wolf?) or activity.
  • If the activity is fun.
  • How they will help the younger section remember what they have learned.

3. After everyone has finished, gather the groups and let each team explain their activity to the rest of the group if they want to.