Life Taught Clearly
View course details

Life Taught Clearly

Credit, Debt, and Financial Traps

Module 2 Worksheet

Part 1 - Foundations check

Mark each statement as Solid, Needs work, or Not yet.

Understands what credit is.
☐ Solid☐ Needs work☐ Not yet
Understands what a credit score means.
☐ Solid☐ Needs work☐ Not yet
Understands what interest is.
☐ Solid☐ Needs work☐ Not yet
Understands how late payments hurt.
☐ Solid☐ Needs work☐ Not yet
Understands why minimum payments can be misleading.
☐ Solid☐ Needs work☐ Not yet
Understands the difference between access and affordability.
☐ Solid☐ Needs work☐ Not yet

Part 2 - Quick understanding check

What is credit?
Why does a credit score matter?
What is interest?
What makes a credit card risky?

Part 3 - Scenario sorting

Click or mark the label that fits best.

Using a credit card for gas, then paying it off in full.
☐ Smart use☐ Risky use☐ Very risky use
Buying clothes you cannot afford and planning to figure it out later.
☐ Smart use☐ Risky use☐ Very risky use
Ignoring a statement because the balance feels stressful.
☐ Smart use☐ Risky use☐ Very risky use
Making a purchase just because there is still room on the card.
☐ Smart use☐ Risky use☐ Very risky use
Using a card for one normal expense you already planned for.
☐ Smart use☐ Risky use☐ Very risky use

Part 4 - Parent-friendly credit example

Use this example to explain why paying in full matters.

Example: $120 charged for gas and clothes

  • • Smart version: charge $120, pay $120 by the due date, interest = $0.
  • • Messy version: only pay a small amount, carry the rest, and now the same purchase costs more than $120.
  • • Teaching line: 'Being able to swipe is not the same as being able to afford it.'
  • • Parent option to discuss: adding a mature teen as an authorized user may help build credit, but only on a well-managed card and only after verifying the issuer's rules and reporting policy.
  • • YOUR TURN — set your family credit rules:
  • • Our rule for the card: ___
  • • Spending limit we agreed on: $___
  • • Payment plan: ___
  • • We will review it together on: ___
What makes this a tool instead of a trap?
What rules would need to exist before a teen touches credit?

Part 5 - Mock W-2 and bill example

These examples help paperwork feel less mysterious.

Mock examples

  • • W-2 example: employer name, wages, and taxes withheld are the main things a beginner should notice first.
  • • Bill example: account name, amount due, due date, and what happens next if ignored.
  • • Teaching point: paperwork is usually trying to tell you what happened, what is due, or what needs action.
If a teen saw a bill for the first time, what should they look for first?
What would you want your teen to understand from a simple W-2?

Part 6 — Credit score factors

Use this to explain how a credit score is actually built.

The 5 factors that build a credit score

  • • Payment history (~35%): do you pay on time? This matters more than anything else.
  • • Credit utilization (~30%): how much of your available credit are you using? Stay under 30% if possible.
  • • Length of history (~15%): how long have your accounts been open? Older is generally better.
  • • Credit mix (~10%): do you have different types of credit (cards, loans)? A mix can help a little.
  • • New inquiries (~10%): how often do you apply for new credit? Too many applications at once can temporarily lower the score.
Which factor is easiest for your teen to control right now?
What one habit would most improve a credit score over time?

Next action

This week, tie this worksheet to the exact lesson you just finished, then practice one work-and-responsibility move for real: show up on time, follow through, make one better decision, or own one task without reminders.

Write the commitment here