F. Financial Literacy · Money and Finances: Exchange Rates, Budgets, Financial Decisions and Interest

Personal Factors in Financial Decisions

F1.4 A1About 40 minutes

Learning goals

I can name personal factors that influence money decisions.
I can describe the effect each factor might have on a decision.
I can use math, like cost per use and hours of work, to think through a decision.
I can explain opportunity cost.

Words to know

financial decision
A choice about earning, spending, saving, giving or borrowing money.

personal factor
Something about you or your own situation that affects a money decision: your needs, wants, values, feelings, habits, goals, income and knowledge.

values
The things that matter most to you, like family, the environment, health or helping others.

impulse buying
Buying something suddenly, without planning, often because of a feeling.

opportunity cost
What you give up when you choose one thing over another.

cost per use
The price divided by the number of times you use something.

Remember from Grade 6

In Grade 6 you looked at things that help you reach a financial goal (like a plan and patience) and things that get in the way (like advertising and impulse buying).

In Grade 7 you'll sort influences into two big groups and describe how each one can change a decision:

Personal factors (this lesson): things about you.
Societal factors (next lesson): things about the world around you.

Two friends, two choices

Amara and Theo each got $80 for their birthdays.

Amara bought new wireless earbuds the same day. A week later, she wished she'd kept some money for the school trip.
Theo put $60 in his savings for a used bike and spent $20 on a book series he'd wanted for months.

Neither of them is "bad" with money. They made different choices because of different personal factors: their feelings, goals, values and habits.

A blue bicycle leaning against a wooden fence in a sunny backyard. — Theo saved most of his birthday money for a used bike. His goals and patience shaped his choice. AI-generated image

Personal factor	What it means	Possible effect on a decision
Needs and wants	Needs are things you must have; wants are nice to have	You may put needs first and wait for wants
Values	What matters most to you	Caring about the environment might lead you to buy used or repair things
Goals	What you're saving for	A clear goal makes it easier to say no to impulse buys
Emotions	How you feel: excited, bored, stressed, sad	Strong feelings can lead to impulse buying
Habits	Things you do over and over	Small daily purchases can add up to a lot
Income and stage of life	How much money you have and your age	A student with $20 a week has different choices than an adult with a job
Knowledge and skills	What you know about money	Knowing about interest and fees helps you choose better

Personal factors and how they might affect money decisions.

Worked example

Example 1: Price in hours of work

Theo earns $12 an hour babysitting. A pair of shoes costs $90. How many hours of work is that?

Hours = price ÷ hourly pay = 90 ÷ 12.
90 ÷ 12 = 7.5 hours.

The shoes cost 7.5 hours of babysitting. Thinking of prices in hours of work can help you decide whether something is worth it to you.

Worked example

Example 2: A small habit, a big number

Amara buys a $3.50 drink after school 4 times a week. How much is that in a year (52 weeks)?

Per week: 4 × 3.50 = $14.
Per year: 14 × 52 = $728.

That habit costs $728 a year. If she cut it to once a week, she'd spend 3.50 × 52 = $182 and keep $546 for other goals.

A $3.50 habit four times a week costs $728 a year. Cutting it to once a week costs $182 and frees up $546.

Worked example

Example 3: Cost per use

Two winter coats: Coat A costs $120 and should last the whole winter, about 100 days of wearing. Coat B costs $60 but is thin, so it will probably be worn only about 40 days before the weather gets too cold for it. Which has the lower cost per use?

Coat A: 120 ÷ 100 = $1.20 per day worn.
Coat B: 60 ÷ 40 = $1.50 per day worn.

Coat A costs more up front but less per use. If it fits the family budget, it may be better value. (If it doesn't fit the budget, Coat B might still be the right choice: that's a personal factor too!)

Divide the price by the number of uses. Coat A costs twice as much but is worn for many more days, so each day of wearing costs less: $1.20 compared with $1.50.

Worked example

Example 4: Opportunity cost

Kai saves $50 a month for a laptop. A friend wants Kai to buy a $75 video game. What is the opportunity cost?

$75 is 75 ÷ 50 = 1.5 months of laptop savings.
Buying the game would push the laptop back about 1.5 months, unless Kai finds $75 somewhere else.

The opportunity cost is 1.5 months of progress toward the laptop. Kai might still choose the game, but now it's an informed choice.

The 24-hour rule

When you feel a strong urge to buy something that isn't planned, wait 24 hours (or longer for bigger purchases). Notice the feeling: are you excited, bored, left out? If you still want it tomorrow and it fits your budget, it's more likely a real choice and not an impulse.

Know yourself

Everyone has different values and situations, so different choices can all be reasonable. A good decision is one that fits your goals and values and that you can afford, not one that copies someone else.

Just for fun

The 24-hour rule: wait a day before buying that glow-in-the-dark dinosaur lamp. You might still want it tomorrow, but now it's a decision, not an impulse!

Hands-on activity

My money personality

You need: paper and a pencil.

Think about the last three things you bought or asked for (or wanted).
For each one, write which personal factors influenced you: need or want? a feeling? a habit? a value? a goal?
Choose one of them and work out its cost in hours of work (use a real or pretend hourly pay, like $12 an hour) and its opportunity cost (what else could that money have done?).
Ask a grown-up to share one money decision they made and the personal factors behind it.
Write two sentences: "One factor that helps my money decisions is ___. One factor I want to watch out for is ___."

What to look for: specific factors linked to real decisions, correct calculations and honest reflection. There's no wrong money personality.

Your turn

Is winter boots that fit a need or a want for a student in Ontario? What about designer boots?

You earn $15 an hour. A jacket costs $105. How many hours of work is that?

A $2.25 snack bought 5 times a week. How much per week? Per year (52 weeks)?

Name the personal factor: "I was bored, so I scrolled online and bought a phone case I didn't need."

A $40 board game will be played about 50 times. What is the cost per use?

You choose to spend $30 on a concert ticket instead of saving it for a bike. What is the opportunity cost?

More practice: warm-up

What is a personal factor?

Name two of your own values that might affect how you spend money.

$60 at $12 an hour = how many hours?

A $20 hoodie worn 40 times. Cost per use?

What is impulse buying?

More practice: on your own

Sneakers A cost $90 and last about 300 wears. Sneakers B cost $45 and last about 120 wears. Which has the lower cost per wear?

Maya cares a lot about the environment. Describe how this value might affect two money decisions.

Ravi earns $13.50 an hour. A game costs $81. How many hours is that? Ravi's goal is a $540 used laptop. What fraction of that goal is the game?

Explain how stage of life can change a money decision. Give an example comparing a 12-year-old and an adult.

Sana buys two $1.75 treats every school day (190 school days). Cutting to one a day, how much would she save in a school year?

Challenge

A $300 bike will be ridden about 3 times a week for 30 weeks a year for 2 years. A $180 bike will last only 1 year at the same rate. Which has the lower cost per ride?

Leila earns $14 an hour and saves 25% of her pay. How many hours must she work to save $350?

Describe how two personal factors could work against each other in one decision. Give an example.

Check your understanding

Quiz

Which is a personal factor?

You earn $16 an hour. A $96 item costs how many hours of work?

A $4 drink bought 5 times a week for 52 weeks costs...

What is opportunity cost?

Which has the lower cost per use? Skates A: $150, used for 100 skating sessions. Skates B: $90, used for 50 sessions.

What is the 24-hour rule?

For parents and teachers

Big idea: F1.4 asks students to identify various societal and personal factors that may influence financial decision making, and describe the effects that each might have. This lesson covers personal factors; the next covers societal factors. Grade 6 introduced factors that help or hinder goals, so this lesson goes further by classifying factors and using math (hours of work, cost per use, opportunity cost) to weigh them.

Common difficulties:

Judging choices as right or wrong. Different values can lead to different reasonable choices. Focus on whether a choice is informed and affordable.
Cost per use with decimals: round to the cent and compare.
Naming factors vaguely: help them say exactly how a factor changes a decision.

How to help: Share an example of a money decision you made and what influenced it. Try the 24-hour rule as a family. This lesson builds A1 skills: identifying and managing emotions and developing self-awareness.