Debt, Credit, and Investment Basics

This unit examines debt management, basic investment principles, and credit health. Students differentiate types of debt, apply repayment and budgeting strategies, compare common investment vehicles and risk profiles, and learn to read and improve credit reports and scores.

Learning Objectives

• Analyze and classify types of debt (e.g., secured, unsecured, installment, revolving) to distinguish ‘good’ versus ‘bad’ debt by calculating interest costs, repayment timelines, and effects on cash flow and net worth.
• Apply budgeting techniques and debt-repayment strategies (e.g., snowball, avalanche, consolidation) to develop a prioritized, measurable debt-reduction plan that projects payoff dates and interest savings.
• Evaluate common investment vehicles (e.g., savings accounts, CDs, stocks, bonds, mutual funds, retirement accounts) by assessing risk-return trade-offs and liquidity, and construct a basic diversified portfolio aligned to a stated risk tolerance.
• Demonstrate how to obtain and interpret credit reports and scores, identify reporting errors or derogatory items, and create a step-by-step action plan to improve and monitor credit over time.