CitizenshipLife skills: running your own money30 min★★★ difficulty

Contracts that tie you in: phones, travel and cars

A phone contract, a gym membership and a car all look like a monthly figure. Each is really a total, plus a length you cannot easily escape. This lesson finds the true cost and the exit.

Lesson overview

What you'll learn in this lesson

Understand credit, debt, insurance and the risks attached to different financial products

Key learning points

• A phone is a loan with a handset attached
• Subscriptions add up sideways
• What a car actually costs
• Getting out of things

This lesson at a glance

30 minutes
19 parts to scroll through
4 quick checks
Marked quiz at the end
Gentle pace: short sittings with pauses

Words to know

creditinsuranceattachedfinancialproducts

Scroll down — the lesson carries on below

Part 1 of 19 · Discover5%

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Part 1 of 19

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Contracts that tie you in: phones, travel and cars

An English teaching video on this topic from Transition Abilities. Watch it, then scroll down for the lesson.

In a nutshell

Understand credit, debt, insurance and the risks attached to different financial products

What you already know

Part 2 of 19

Before we start

What you already know

You can multiply a monthly cost by a contract length and compare totals.

Recap: Credit, APR and the real cost of borrowing

Key words

Part 3 of 19

Key words

Words you'll need today

Contract term: The minimum length you are committed to pay for.
Total cost of ownership: Everything a thing costs, not just its price.
APR: The yearly cost of borrowing, including interest and fees.
Rolling contract: A contract you can leave with short notice, usually a month.
Cooling-off period: A short window, often 14 days, to cancel a new contract bought at a distance.

Learning cycle

Part 4 of 19

Learning cycle 1 of 2

The monthly figure and the real total

A short piece of teaching, then a check to make sure it has landed.

Explore the idea

Part 5 of 19

Learn

A phone is a loan with a handset attached

£38 a month for 24 months is £912. The same handset costs £700 to buy, with a £9 rolling SIM: £700 + £216 = £916 in year one, but only £108 in year two — £1,024 over two years against £912. Close. Over three years the contract deal usually loses badly, because you keep paying handset prices for a handset you already finished paying for.

Explore the idea

Part 6 of 19

Learn

Subscriptions add up sideways

Music £11, video £8, gym £28, cloud storage £3, game pass £11 is £61 a month — £732 a year, roughly a month's rent for a first flat. None of them feels like a decision after the first month, which is the point of them. The fix is a yearly review: list every recurring payment from your bank statement and cancel anything you cannot say you used last month.

Quick check

Part 7 of 19

Quick check

£38 a month for 24 months totals:

Quick check

Part 8 of 19

Quick check

Subscriptions of £61 a month cost a year:

Reset break

Part 9 of 19

Pause

That's sitting 1 of 2 done

Stretch, get a drink, look out of the window. There is no timer and nothing is counting down — your place is saved, so you can come back in five minutes or tomorrow.

Stop here for now

Learning cycle

Part 10 of 19

Learning cycle 2 of 2

Cars, credit and getting out

A short piece of teaching, then a check to make sure it has landed.

Explore the idea

Part 11 of 19

Learn

What a car actually costs

A £4,000 used car is the smallest number in the total. Insurance for a new driver £1,300, tax £190, MOT £55, servicing and tyres £350, fuel at 250 miles a week and 45 mpg roughly £1,100, plus depreciation of about £600 a year. That is roughly £3,595 a year, £300 a month, before repairs. Bought on finance at 12% APR, the interest goes on top of all of it.

Explore the idea

Part 12 of 19

Learn

Getting out of things

Rolling contracts cost a little more each month and buy you freedom; fixed terms are cheaper and trap you. For anything bought online or by phone there is usually a 14-day cooling-off right. Ending a fixed term early normally means paying the remaining months, so the question to ask before signing is not 'can I afford this month?' but 'can I afford every month of this, and what happens if I cannot?'

Quick check

Part 13 of 19

Quick check

Which is the largest yearly cost for a new driver's £4,000 car?

Quick check

Part 14 of 19

Quick check

A rolling contract's advantage is:

Common mix-ups

Part 15 of 19

Common mix-ups

Things people often get wrong

Judging a contract on its monthly figure instead of its total.
Thinking a fixed-term contract can be cancelled freely at any time.
Counting only the purchase price of a car and not insurance, tax, fuel and depreciation.

Challenge round

Part 16 of 19

Game · Sort it

Which of these are true?

Drag each card into the right column. Tap a card first if dragging is fiddly.

True

Not true

Challenge round

Part 17 of 19

Game · Fill the gaps

Finish the sentences

Choose the word that belongs in each gap.

____ for a new driver £1,300, tax £190, MOT £55, servicing and tyres £350, fuel at 250 miles a week and 45 mpg roughly £1,100, plus depreciation of about £600 a year.

Mastery quiz

Part 18 of 19

Marked quiz

End of lesson quiz: Contracts that tie you in: phones, travel and cars

3 questions, marked with the reasoning shown. No timer.

1. Total cost of ownership means:
2. The usual cooling-off period for a contract bought online is:
3. Leaving a 24-month contract after 6 months normally means:

Lesson round-up

Part 19 of 19

Lesson round-up

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Do the work

Your written work for this lesson

This is the part you'd do in your book at school. Pick the pieces below, write here or on paper, and photograph anything you draw or work out.

Case study

Should the town centre have a curfew for under-16s?

After a rise in reported vandalism, Harbrook council proposed that under-16s should not be in the town centre after 9 pm without an adult. Police recorded 62 incidents last year, most between 9 pm and midnight. Shopkeepers signed a petition supporting the plan.

A youth council objected. They pointed out that most young people in town at night were going home from sports clubs or work, that the plan punishes a whole group for the acts of a few, and that the library and the bus interchange are in the town centre. They asked instead for a late bus and a youth space.

The council voted to trial the curfew for six months and to publish the crime figures at the end.

Written for Good Learning Co.

Reading questions

Give the strongest point on each side of the argument, using a fact from the case.
Whose rights and whose responsibilities are involved here? Explain both.
Write your own view on the curfew with reasons and one example.

Reading and response
Reading
Read the case in the lesson again and write what you think should happen, and why it is fair. Use one fact from the case as evidence.
2 paragraphs (PEE)
Extended writing
Writing
Write your answer to the lesson's big question in full: the strongest point on each side, then your own view with reasons and an example.
250–350 words
Reading log
Reading
Find one news story this week that links to this lesson. Note the headline, where you read it, and how it connects.
1 story, 4–5 sentences
Two sides of the argument
Writing
Write the strongest point for, the strongest point against, and then your own view with a reason.
3 paragraphs
Poster or leaflet plan
Diagram
Plan a leaflet that explains this right or responsibility to someone your age, then photograph it.
1 planned page

Write your answer, notes or working here

Saved as you type.

Photos of paper work, diagrams or working outHow many minutes did the written work take?

Part 1 of 19 · Watch & discover

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