Paying Money Back
If you borrow money, you need a plan for paying it back.
Repaying $20
Regular repayments steadily reduce the amount owed until it reaches zero.
Understanding a repayment plan
Before borrowing, it's important to understand how much you owe, when you need to repay it, how much each payment will be, and whether interest or fees apply.
Repayments and your budget
Repayments become part of the money you need to plan for — right alongside your other budget items. Planning ahead for a repayment is just as important as planning for anything else.
What if you can't repay?
If someone can't make a repayment, the right step is to talk to the person or organisation they owe, and get help from a trusted adult where appropriate. It's always better to communicate early than to avoid the problem.
Plan a $30 repayment
You owe $30. Would you repay $10 a week, $5 a week, or another amount? How long would each option take?
$10 a week takes 3 weeks. $5 a week takes 6 weeks. A smaller weekly amount takes longer but might be easier to manage alongside everything else you're spending on.
If interest is added on top, would the total repaid be more or less?
More — interest adds an extra cost on top of what you originally borrowed.
The aim here is teaching responsibility and planning — not encouraging your child to borrow money just to practise repaying it.
Where to next
More on debt and borrowing.