Empirical measurement of the financial socialisation of children by parents

Abstract

Purpose This paper aims to use the age of a child when pocket money is first received, a savings account is first opened and financial discussions between parent and child commence as factors to assess financial socialisation of children by parents in the home. The impacts on financial knowledge, attitudes and behaviour of young teenagers of each of the three age-related variables mentioned above were then examined. Design/methodology/approach Using a questionnaire, data were collected from a sample of 1,247 14 and 15 year olds. Regressions were run to calculate how the ages children first received pocket money, had a savings account and started having financial discussions with parents correlated with impulsive spending behaviour, financial quiz scores, saving intentions and whether parents were seen as role models. Findings Financial discussions between parent and child were found to be an important influence on future financial knowledge, attitudes and behaviour. In addition, savings accounts can provide young teenagers with access to funds, which could be spent unwisely without associated financial awareness. Financial discussion in the home between parent and child was the most influential of the three factors examined. Putting money into a savings account and the giving of pocket money can provide further opportunities to engage in financial socialisation. Research limitations/implications Limitations of this study include the self-reported nature of the age variables. Future projects could use social research techniques, such as personal interviews of family members or keeping financial diaries. Rich qualitative data could further inform the findings of the current study. Practical implications Educational finance courses should include an objective of incorporating and stimulating financial discussions in the home, as talking about finances appears to be one of the most effective financial socialisation factors for children. Originality/value While previous research has identified the process of financial socialisation, the originality of this paper is its examination of the influence of individual financial socialisation factors in the home on financial attitudes, knowledge and behaviour.

Mobile Payment Adoption Among Youth: Generation Z and Developing Country Perspective

“…Their peers highly influence youngsters to form their interests and efforts (Mazman et al, 2009). They spend much time with friends, peers, and family and seek their opinions on making financial decisions (Agnew, 2018;Bamforth et al, 2017).…”

Elevating Financial Literacy Among Non-Governmental Organizations (NGOs) Rulers: Cognitive Understanding of Financial Knowledge, Skills and Responsibility

“…There is a positive relationship between financial responsibility of individuals who are involved in financial learning more often (Wagner, 2015). As indicated by Mohamed (2017); Agnew (2018), the interaction between financial literacy and financial attitude showed a positive relationship and affects financial responsibility. Therefore, there is a significant relationship between financial responsibility and financial literacy.…”

Parental Financial Socialisation: Pathways to Positive Financial Behaviour

“…Perceived financial communication, perceived financial modelling, perceived parental financial expectation have been identified as effective ways for parents to socialise and develop positive financial behaviours (Shim et al, 2015). Families' financial activities such as opening a bank account, giving pocket money, conversation about savings and money issues, allowing children to observe money transactions influence youth in shaping and developing knowledge, skills and right attitude (Agnew, 2018). Evidence also shows that students develop a financial economic understanding, skills, and habits not just by talking with parents but also through their personal experiences, and learning by doing (Otto & Webley, 2016).…”