Childhood Financial Socialization
Childhood Financial Socialization and
Young Adults’ Financial Management
Jinhee Kim and Swarn Chatterjee
The current study investigates the association between childhood financial socialization and financial practices and asset choices of young adults, using a nationally representative dataset. Results revealed that childhood financial socialization experiences were positively associated with the beneficial financial practices and financial asset ownership of respondents in young adulthood. Financial outcomes were found to vary by types of parental socialization. Respondents who owned bank accounts and had their spending monitored by parents in childhood were more likely to own financial assets and had more positive attitudes toward personal finance as young adults.
Key Words: asset ownership, financial competence, parental financial socialization, transitioning adulthood
Introduction
Researchers, educators …show more content…
Acquisition of mathematical skills and problem-solving abilities in childhood is likely to influence the development of financial management skills in adolescence and young adulthood.
Adolescent Factors
Graduation from high school, post-secondary education, and obtainment of a college degree have all been associat-ed with greater financial knowledge and savings behavior in young adulthood (Cole & Shastry, 2009; Lusardi et al., 2010). Education was positively associated with financial behaviors such as savings, investing (Bertaut & Starr-Mc-
Cluer, 2001; Cole & Shastry, 2009), and portfolio manage-ment (Campbell, 2006).
Participation in the workforce is common during adoles-cence (Mortimer, Harley, & Staff, 2002), and researchers have explored the positive and negative effects of em-ployment on adolescent development for more than two decades (e.g., Greenberger & Steinberg, 1986). Two de-
62 Journal of Financial Counseling and Planning Volume 24, Issue 1
Young Adults’ Financial Management
Jinhee Kim and Swarn Chatterjee
The current study investigates the association between childhood financial socialization and financial practices and asset choices of young adults, using a nationally representative dataset. Results revealed that childhood financial socialization experiences were positively associated with the beneficial financial practices and financial asset ownership of respondents in young adulthood. Financial outcomes were found to vary by types of parental socialization. Respondents who owned bank accounts and had their spending monitored by parents in childhood were more likely to own financial assets and had more positive attitudes toward personal finance as young adults.
Key Words: asset ownership, financial competence, parental financial socialization, transitioning adulthood
Introduction
Researchers, educators …show more content…
Acquisition of mathematical skills and problem-solving abilities in childhood is likely to influence the development of financial management skills in adolescence and young adulthood.
Adolescent Factors
Graduation from high school, post-secondary education, and obtainment of a college degree have all been associat-ed with greater financial knowledge and savings behavior in young adulthood (Cole & Shastry, 2009; Lusardi et al., 2010). Education was positively associated with financial behaviors such as savings, investing (Bertaut & Starr-Mc-
Cluer, 2001; Cole & Shastry, 2009), and portfolio manage-ment (Campbell, 2006).
Participation in the workforce is common during adoles-cence (Mortimer, Harley, & Staff, 2002), and researchers have explored the positive and negative effects of em-ployment on adolescent development for more than two decades (e.g., Greenberger & Steinberg, 1986). Two de-
62 Journal of Financial Counseling and Planning Volume 24, Issue 1