Does Parental Financial Communication Affect Emerging Adults’ Financial Behavior?

Abstract

This study focuses on investigating the relation between parental financial communication and financial behavior in emerging adults, an issue which most studies have less intention in the current literature. Primary data were used with a cohort of university students that taken financial courses in 2019/2020 academics year in State University of Medan with total sample (n = 241) to develop a pathways model of parental financial communication towards emerging adults Financial Behavior. The sample participants ranged from 18 to 25 years old. The finding confirms the existence of parental financial communication relationship towards the development of emerging adults' financial behavior. More importantly, direct financial communication reveals significant in reflecting parental financial communication as latent variable rather than indirect financial communication. Moreover, direct parental financial communication trigger general management and capital accumulation management as a reflection of the development of emerging adults' financial behavior as latent variable.