Final answer:
Understanding financial influences is crucial for making informed decisions, with changes in prices and income affecting consumer behavior and financial success depending on prudent practices such as early savings and education.
Step-by-step explanation:
Understanding the psychological and sociological factors that influence personal finance is pivotal in making informed financial decisions. Factors such as changes in prices and income can impact consumer behavior. For example, an increase in income often leads to a higher demand for normal goods, but a decline in demand for inferior goods. Conversely, an increase in prices generally results in a decreased demand for the good whose price has risen. Additionally, circumstances such as educational attainment and starting to save money early in life can contribute to financial success. These examples demonstrate why some individuals may choose to change their buying behavior to better align with their financial goals, while others might need more time or expertise to make that decision.