Unit 2 1.4

• Internal factors


  Those that come from within people themselves
• Key internal factor affecting choices

  Personal set of values, beliefs and attitudes
• Values, beliefs and attitudes tend to be fairly stable and may not change significantly
• Values


  General feelings or beliefs about desirable behaviour and goals
• Values


  • Help people distinguish between needs and wants, and form aspirations
  • Help people plan finances and decide between alternatives
• Values


  • Young people living in the present vs planning for the future
• Beliefs


  More specific and detailed than values, about how things are rather than how they ought to be
• Beliefs


  • Acceptable to charge reasonable interest on loans, but not too much
  • If interest rates rise, people will borrow less
• Attitudes


  How people think and feel about another person, event or issue at a given time and place
• Attitudes can be changed by circumstances, events, experience or advice
• Attitudes

  • Attitude to saving for retirement changing as people get older
• Perceptions


  People's understanding of the world around them, from sensory and non-sensory inputs
• Preferences


  People's preferences for particular products, often depending on personal values, beliefs and attitudes
• Preferences


  • Different preferences for features of financial products like savings accounts and loans
• Preferences


  • Preferences for distribution channels like branch, phone or online banking