Interest Rates

As Interest Rates keep going up, this is a good time to teach students how this affects them. I mention this to students and they shrug their shoulders and think it doesn’t have anything to do with them.

I try to explain that this can affect credit card payments. If a credit card isn’t paid off in full every month, interest rates are charged. This means you pay back what you have used plus extra money. The higher the interest rate, the more extra money that has to be paid. If this happens, there is less available cash available for fun.

If people have a house loan or a car loan, this could affect the monthly payments that are being made. If students are getting money from their parents for fun things, parents may have less money to give their children.

If people are paying more for their house loan and are renting this house out, the rent on homes may increase which again will cause the family to have less money to spend on fun things.

So even though raising interest rates might not affect a student directly, it could impact them indirectly. This is a good time to help students think of ways that they can help their family such as saving money, getting a part-time job, recycling things for other uses instead of buying new, using generic brand items instead of name brand items, and reducing waste.

What other suggestions would you make? Please share.

Photo by Kenny Eliason on Unsplash