Does Parental Financial Socialization for Emerging Adults Matter? The Case of Austrian and Slovene First-Year University Students

Abstract

The study tested a model of first-year university students’ financial socialization focusing on parents as financial socialization agents and students’ present financial outcomes. Results from 395 Austrians (70% females) and 412 Slovenes (55% females) revealed significant pathways from recollected socialization experiences to students’ self-perceived financial learning outcomes (adopting parental role modeling and financial knowledge) and financial behavior control. Financial knowledge and behavioral control partly mediated the effect of prior socialization experiences on students’ financial behavior, financial relationship with parents, and financial satisfaction. Among country-specific pathways, adopting parental role modeling indirectly influenced financial outcomes in the Slovene students, whereas for the Austrian students, it was directly associated with better financial relationships with parents. Our findings on the pathways to healthy financial outcomes provide important suggestions to parents and emerging adult students.

Saving of Freshmen and Their Parents in Slovenia: Saving Motives and Links to Parental Financial Socialization

“…Specifically, do students whose parents save money, also save themselves (RQ2)? Given that parental healthy financial behavior was found directly related to the respective emerging adults’ behavior (Sirsch et al, 2019 ; Tang, 2017 ), we deduced that it may also hold specifically for saving as one of the healthy money management future-oriented strategies. However, the investigation into the dyadic agreement of the saving motives was merely explorative due to a lack of background evidence.…”

“…Over the past decade, a growing number of studies on family financial socialization and its outcomes in emerging adulthood have accumulated (e.g., Jorgensen & Savla, 2010 ; Lanz et al, 2020 ; Serido et al, 2010 , 2013 ; Shim et al, 2010 , 2015 ; Sirsch et al, 2019 ). The results have clearly shown that parents continue to financially socialize their children well into emerging adulthood, both explicitly (e.g., through direct teaching, positive reinforcement, coaching, conversations about money) and implicitly (through the quality of parent–child communication, observation of parental behavior, role modeling, family economic enmeshment) (Lanz et al, 2020 ; Shim et al, 2010 , 2015 ; Sirsch et al, 2019 ). Parental anticipatory and concurrent financial socialization thus shapes a range of financial behaviors, attitudes and norms of emerging adults (Gudmunson & Danes, 2011 ; Shim et al, 2010 ; Serido et al, 2010 ; see also LeBaron et al, 2019 for a review).…”

“…Of all the socializing agents (friends, financial learning through formal education, and self-motivated activities), parents had the greatest influence on the change in students’ financial attitudes, control, and efficacy, which subsequently predicted a change in healthy financial behavior over a four-year college period (Shim et al, 2015 ). For the purpose of the last part of our study, which links parental financial socialization with money saving among university freshmen, we drew from the model of financial socialization of first-year students by Shim et al ( 2010 ), mainly because the proposed pathways of parental financial socialization characteristics to healthy financial behavior of freshmen were later supported in Austrian and Slovenian samples (Sirsch et al, 2019 ). The model claims that the anticipatory financial socialization of students during adolescence (e.g., direct financial teaching, parental financial behavior) influences their financial learning outcomes (e.g., adopting parental financial role modeling, subjective financial knowledge), which in turn contribute to their financial attitudes (e.g., the importance of saving) and further lead to healthy financial behavior (e.g., saving money).…”

“…Research on adolescents’ and young adults’ saving has shown notable differences along class lines (Friedline et al, 2012 ). High rates of saving among youth have been associated with higher levels of parental education (Friedline et al, 2012 ; Fry et al, 2008 ), family income and parental financial socialization (Shim et al, 2010 ; Sirsch et al, 2019 ; Webley & Nyhus, 2006 ), especially parental encouragement to save money and parental saving (Friedline, 2012 ; Friedline et al, 2012 ; Otto, 2013 ; Webley & Nyhus, 2013 ). That is why we decided to look into parental saving and demographic characteristics of parents in addition to exploring the role of student percieved parental financial socialization practices in students’ saving and their motives to save money.…”

“…Studies on financial functioning of emerging adults suggest that healthy financial behavior (e.g., spending within budget, saving) promotes their financial well-being (e.g., Serido et al, 2010 ; Sirsch et al, 2019 ), which, in turn, is linked with many positive outcomes, such as physical and psychological health, academic success, and overall subjective well-being (Iannello et al, 2020 ; Shim et al, 2009 ; Sorgente & Lanz, 2019 ; Xiao et al, 2009 ). Adolescents and emerging adults, however, have less experience with healthy financial behavior, and may be more impulsive in their spending than adults (see Brici et al, 2013 ).…”