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F1.4 · Explain personal and social influences on financial decisions

Learn to explain personal and social influences on financial decisions through clear examples and targeted practice.

Ontario Grade 7 Mathematics

Financial Literacy

Personal and social influences on choices about money

A financial decision is a choice about money, such as what to buy, save for, or give. People may face the same choice but decide differently. Their choices can be shaped by personal influences, such as their goals, needs, and values, and by social influences, such as family, friends, advertising, and community expectations. An influence is something that can affect a choice. An influence does not make the choice for a person. In this lesson, you will learn to name relevant influences and explain how they might matter.

What you will learn

Describe personal influences that can shape a financial decision.
Describe social influences that can shape a financial decision.
Explain how different influences may lead people to make different choices.

Start with the person and the choice

Before explaining a financial decision, state what the person is choosing. For example, a student has some gift money and is deciding whether to buy a new game or save for a bicycle. The choice is not only about which item seems appealing. The student may also think about what they need, what they value, and what they hope to do later.

A need is something important for health, safety, or everyday life. A want is something a person would like but can live without. The difference can depend on the situation. A winter coat may be a need for someone who lacks one. A particular style of coat may be a want if another suitable coat is already available.

A personal influence comes from the person's own situation or ideas. Examples include a goal, a need, a preference, a responsibility, or how much money is available. A social influence comes from other people or from messages and expectations in the person's community. Examples include advice from family, friends' opinions, advertising, and community customs.

These influences can point in different directions. A student may personally want to save for a bicycle, while friends encourage the student to buy a game they all play. Explaining the decision means connecting an influence to a possible effect: saving for the bicycle may matter because it is the student's goal; friends' opinions may make the game feel more appealing.

Name the choice before discussing its influences.
Personal influences relate to the person's own situation, goals, or preferences.
Social influences come from people, messages, or community expectations.

Notice how social influences work

People often hear suggestions about what to buy or how to use money. A family member may recommend saving. A friend may recommend a popular item. An advertisement may make a product seem exciting or necessary. These are social influences because they come from outside the person.

Social influence is not always harmful or helpful. A relative's advice may help someone think carefully. Pressure from friends may lead someone to choose something they do not really want. An advertisement may share useful information, but it may also focus on making a product attractive. The person can notice the influence and decide whether it fits their own needs and goals.

A person's financial choices may also be shaped by family or community practices. For example, a family may make giving to others an important priority. Someone may choose to set aside some money for that purpose because it matches a value shared at home. People in the same community can still make different choices.

When you explain an influence, avoid guessing what everyone thinks. Use details from the situation. Say, 'The student may feel encouraged by a friend's suggestion,' rather than, 'All students buy what their friends buy.'

Social influences can support a choice or create pressure.
People can consider advice without automatically following it.
Use the details given; do not make claims about whole groups.

Explain a choice with a clear link

A clear explanation has three parts: identify the influence, connect it to the person's choice, and explain why it matters. For example: 'Saving for a bicycle is the student's personal goal. That goal may lead the student to keep the gift money instead of buying a game now.' The link between the goal and the choice makes the explanation clear.

A small comparison can help organize your thinking. The table shows possible influences in one made-up situation. It does not describe real students or claim that these influences always lead to the same choices.

Sometimes a decision has more than one influence. A student may want a new backpack because the old one is torn, prefer a certain colour, and hear a friend's recommendation. The torn backpack relates to a need, the colour is a personal preference, and the friend's recommendation is a social influence. Naming each influence separately helps explain how they could affect the choice.

Link each influence to a possible effect on the choice.
One decision can have several personal and social influences.
An influence may affect a decision without deciding it completely.

Try it yourself

For practice, imagine a student choosing between two uses for a small amount of saved money: buying art supplies or keeping the money for a later goal. Identify one personal influence and one social influence in a situation you create. Then explain how each could affect the choice. Keep your explanation tied to the details you chose.

You can use this sentence pattern: 'A personal influence is . It may affect the choice by . A social influence is . It may affect the choice by .' The pattern is a way to organize an explanation, not a rule that everyone must make the same decision.

Use details from the situation rather than assumptions.
Explain how each influence might affect the choice.
Different people can reasonably make different decisions.

Possible influences in a made-up choice

Situation detail	Type of influence	Possible effect
A student hopes to save for a bicycle	Personal goal	May encourage saving
A friend recommends a game	Social influence	May make the game more appealing
A family values helping others	Social influence	May make giving important to consider

Worked example

A goal and a friend's suggestion

Mina has gift money. She wants to save for a bicycle, but her friend suggests buying a game they can play together. Identify one personal influence and one social influence. Explain how each could affect Mina's choice.

Name the choice
Mina is choosing whether to spend the gift money on a game or keep it toward a bicycle.
Identify the personal influence
Her bicycle goal is personal because it is something she wants for herself. It may lead her to save rather than spend the money now.
Identify the social influence
Her friend's suggestion is social because it comes from another person. It may make the game more appealing, especially because they could play together.

Answer: Mina's bicycle goal is a personal influence that may encourage her to save. Her friend's suggestion is a social influence that may encourage her to buy the game. The situation does not tell us which choice Mina will make.

Check: The explanation does not treat the friend's suggestion as a command or assume that Mina must follow it.

Worked example

A need, a preference, and an advertisement

Noah's backpack is torn, and he is deciding whether to replace it. He likes a bright-coloured bag shown in an advertisement. Identify the personal and social influences, and explain how they may affect his decision.

Separate the details
The torn backpack may point to a need for a usable replacement. Noah's liking for the bright colour is a personal preference.
Notice the social influence
The advertisement is a social influence because it is a message from outside Noah. It may draw his attention to that particular bag.
Explain the possible effects
The torn bag may make replacing it seem important. Noah's preference and the advertisement may affect which replacement he likes. The details do not tell us whether he will buy that bag.

Answer: The torn backpack may create a personal need to find a usable one. Noah's colour preference is also personal. The advertisement is a social influence that may make the bright bag more appealing.

Check: The explanation distinguishes needing a usable backpack from wanting one particular colour or style.

Worked example

A family value

Asha is deciding what to do with some money she received. Her family often talks about helping neighbours, and Asha also hopes to save for a book. Explain how these influences could shape her choice.

Find the personal influence
Saving for the book is Asha's personal goal. It may lead her to keep some or all of the money for later.
Find the social influence
Her family's conversations about helping neighbours are a social influence. They may lead Asha to consider giving as one possible use for the money.
Keep the explanation open
Both influences may matter. The situation does not say how much money Asha has or what she will decide, so we should not claim that she must choose one option.

Answer: Asha's book is a personal goal that may encourage her to save. Her family's value of helping neighbours is a social influence that may make giving important to her. Both may shape her decision.

Check: The explanation connects each influence to a possible effect and does not assume Asha's final choice.

Common mistakes and how to avoid them

Calling every influence social because it affects a decision.

Correction: Ask where the influence comes from. A person's own goal is personal; a friend's suggestion is social.

Saying that an influence forces someone to choose one option.

Correction: Use words such as 'may affect' or 'could encourage.' An influence can matter without deciding the choice.

Treating a want as a need in every situation.

Correction: Consider the person's situation. A usable backpack may be needed, while a particular colour may be a preference.

Claiming that everyone in a group makes the same money choice.

Correction: Explain only what the situation supports. People can respond differently to the same influence.

Lesson summary

Financial decisions are choices about money.
Personal influences include goals, needs, preferences, responsibilities, and a person's situation.
Social influences include suggestions, family values, advertising, friends' opinions, and community expectations.
A good explanation names an influence and tells how it may affect the choice.
Influences can work together, and they do not determine a person's decision.

Check your understanding

Question 1

Leo wants to save for a new book. His cousin suggests buying a snack instead. Which answer correctly identifies the influences?

The book goal is personal; the cousin's suggestion is social.
The book goal is social; the cousin's suggestion is personal.
Both influences are personal because Leo is making the choice.
Neither detail can influence a financial decision.

Show answer and explanation

The book goal is personal; the cousin's suggestion is social.

Leo's own goal is personal. The suggestion comes from another person, so it is social.

Question 2

An advertisement makes a pair of shoes look exciting. What is the best explanation?

The advertisement may affect which shoes the person wants, but it does not decide for them.
The advertisement proves the shoes are a need.
Everyone who sees the advertisement will buy the shoes.
An advertisement is a personal goal.

Show answer and explanation

The advertisement may affect which shoes the person wants, but it does not decide for them.

An advertisement is a social influence. It may affect a choice, but people can respond in different ways.

Question 3

A student hopes to save for a school trip. Their family encourages saving too. What is true?

The trip goal is personal, and the family's encouragement is social.
Both influences are social because they involve saving.
Both influences are personal because the student decides.
The family encouragement means the student has no choice.

Show answer and explanation

The trip goal is personal, and the family's encouragement is social.

The student's own goal is personal. Encouragement from family is social. Both may support the same choice.

Key terms

Financial decision: A choice about money, such as what to buy, save for, or give.
Influence: Something that can affect a person's choice.
Personal influence: An influence connected to a person's own situation, goals, needs, or preferences.
Social influence: An influence that comes from other people, messages, or community expectations.
Need: Something important for health, safety, or everyday life.
Want: Something a person would like but can live without.
Preference: Something a person likes or chooses over other options.

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Published by DoAssignment. This reviewed lesson follows Ontario Grade 7 Mathematics, expectation F1.4. It is a study resource, not an official curriculum publication.

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