Lydia and Tyler are planning to get married, but they have all sorts of unresolved issues. He has credit card debt ($5,000!) and student loan debt ($10,000) — should they pay it off now or wait?

They want to buy a house and before long, have children. Should they save up money first, or just take the plunge?

And Tyler’s thinking about going back to school to study law. Is it worth it? Or would he be better off keeping his current job, as a lobbyist assistant?

Reading a textbook about personal finance is kind of boring. Who really wants to memorize the difference between liability coverage, collision coverage and comprehensive coverage?

But talking about real personal finance issues — and giving advice to a fictional couple — is a lot more engaging. Last year, the Minnesota Council for Economic Education changed the format of its “Personal Finance Decathlon” from a series of tests to a case study analysis. I loved it. Listening to the students’ presentations and advice — down to how to plan a thrifty wedding — was priceless.

This year, in order to prepare my students, I’m using last year’s case study (written by University of Minnesota Prof. Donald Liu) as an inquiry-based lesson for teaching personal finance. Each week, the students look at one part of Lydia and Tyler’s story and decide what they should do.

This past week, they made recommendations about managing debt. The students had to learn a little about debt — like how much interest builds up on credit card debt, and what it costs to borrow for a mortgage right now — in order to make solid recommendations.

They unanimously recommended paying down Tyler’s credit card debt right away.

“The debt will cost $73.82 in interest per month, and it will compound if not paid,” one group said. “We recommend repaying it with Lydia’s savings immediately to avoid any interest payment at all.”

Next week, they’ll give advice about saving for cars, college, a house, future children, retirement and a rainy day fund. That’s a lot to think about, especially for high school students who haven’t made any of these decisions for themselves yet.

I believe that when kids are applying their knowledge to real-world situations, they’re more likely to remember what they’re learning. Perhaps they’ll even take a few of these lessons to heart.

I’m posting the lesson here. If you try it, let me know how it works for you.