Skip to main content
SpringerLink
Log in
SpringerLink
Log in

Financial Parenting: Promoting Financial Self-Reliance of Young Consumers

  • Chapter
  • First Online:
Handbook of Consumer Finance Research

Abstract

This chapter reviews the financial parenting practices that foster the development of children’s financial knowledge and skills, preparing them to become financially self-reliant adults. Financial self-reliance encompasses financial independence and financial capability as well as the ability to make prudent financial decisions based on available options and resources. In many countries, financial self-reliance is a key marker of adult status. Parents play an important role in shaping the financial knowledge and skills their children need to achieve this milestone. Financial parenting refers to three contexts through which parents influence children’s progress toward financial self-reliance: socialization, parenting style, and parental social class. This chapter has two objectives: (1) to describe the ways that financial parenting promotes the acquisition of financial knowledge and skills and (2) to propose how financial parenting promotes or constrains financial self-reliance. We conclude with recommendations for those who work with or on behalf of young consumers.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 69.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 89.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 119.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  • Abramovitch, R., Freedman, J. L., & Pliner, P. (1991). Children and money: Getting an allowance, credit versus cash, and knowledge of pricing. Journal of Economic Psychology, 12, 27–45. doi:10.1016/0167-4870(91)90042-R.

    Article  Google Scholar 

  • Aizcorbe, A. M., Kennickell, A. B., & Moore, K. B. (2003, January). Recent changes in U.S. family finances: Evidence from the 1998 and 2001 Survey of Consumer Finances. Federal Reserve Bulletin, 89, A1–A32. Retrieved from http://www.federalreserve.gov/pubs/bulletin/2003/0103lead.pdf

  • Allen, M. W., Edwards, R., Hayhoe, C. R., & Leach, L. (2007). Imagined interactions, family money management patterns and coalitions, and attitudes toward money and credit. Journal of Family and Economic Issues, 28(1), 3–22. doi:10.1007/s10834-006-9048-1.

    Article  Google Scholar 

  • Anderson, G., Zhan, M., & Scott, J. (2004). Targeting financial management training at low-income audiences. The Journal of Consumer Affairs, 38(1), 167–177. Retrieved from http://www.jstor.org/stable/23860006.

    Article  Google Scholar 

  • Arnett, J. J. (2004). Emerging adulthood: The windings road from the late teens through the twenties. New York: Oxford University Press.

    Google Scholar 

  • Ashby, J. S., Schoon, I., & Webley, P. (2011). Save now, save later? European Psychologist, 16(3), 227–237.

    Article  Google Scholar 

  • Bernheim, B. D., Garrett, D. M., & Maki, D. M. (2001). Education and saving: The long-term effects of high school financial curriculum mandates. Journal of Public Economics, 80(3), 435–465. doi:10.1016/S0047-2727(00)00120-1.

    Article  Google Scholar 

  • Britt, S., Cumbie, J. A., & Bell, M. M. (2013). The influence of focus of control on student financial behavior. College Student Journal, 47(1), 178–184.

    Google Scholar 

  • Bucciol, A., & Veronesi, M. (2014). Teaching children to save: What is the best strategy for lifetime savings? Journal of Economic Psychology, 45, 1–17. doi:10.1016/j.joep.2014.07.003.

    Article  Google Scholar 

  • U. S. Census Bureau (2013). American Community Survey, 2009–2013 and decennial census 1980, 1990, 2000. Available from http://www.census.gov/content/dam/Census/newsroom/c-span/2015/20150130_cspan_youngadults.pdf

  • Cho, S. H., Gutter, M., Kim, J., & Mauldin, T. (2012). The effect of socialization and information source on financial management behaviors among low-and moderate-income adults. Family and Consumer Sciences Research Journal, 40, 417–430. doi:10.1111/j.1552-3934.2012.02120.x.

    Article  Google Scholar 

  • Clarke, M. G., Heaton, M. B., Isrelsen, C. L., & Eggett, D. L. (2005). The acquisition of family financial roles and responsibilities. Family and Consumer Sciences Research Journal, 33(4), 321–340.

    Article  Google Scholar 

  • Conger, R. D., & Conger, K. J. (2008). Understanding the processes through which economic hardship influences families and children. In D. R. Crane & T. B. Heaton (Eds.), Handbook of families and poverty (pp. 64–81). Thousand Oaks, CA: Sage Publications.

    Chapter  Google Scholar 

  • Cortina, L. M., Curtin, N., & Stewart, A. J. (2012). Where is social structure in personality research? A feminist analysis of publication trends. Psychology of Women Quarterly, 36(3), 259–273. doi:10.1177/0361684312448056.

    Article  Google Scholar 

  • Danes, S. M. (1994). Parental perceptions of children’s financial socialization. Journal of Financial Counseling and Planning, 5, 127–149.

    Google Scholar 

  • FINRA IEF. (2009). Financial capability in the United States: National Survey—Executive Summary. Washington, DC: Author. Retrieved from www.finrafoundation.org/capability.

    Google Scholar 

  • FINRA IEF. (2013). Financial capability in the United States: Report of financial capability in the United States. Washington, DC: Author. Retrieved from http://www.usfinancialcapability.org/downloads/NFCS_2012_Report_Natl_Findings.pdf.

    Google Scholar 

  • Grinstein-Weiss, M., Spader, J., Yeo, Y. H., Taylor, A., & Books Freeze, E. (2011). Parental transfer of financial knowledge and later credit outcomes among low-and moderate-income homeowners. Children and Youth Services Review, 33(1), 78–85. doi:10.1016/j.childyouth.2010.08.015.

    Article  Google Scholar 

  • Gudmunson, C. G., & Danes, S. M. (2011). Family financial socialization: Theory and critical review. Journal of Family Economic Issues, 32(4), 644–667. doi:10.1007/s10834-011-9275-y.

    Article  Google Scholar 

  • Hacker, J. S. (2006). The great risk shift: The assault on American jobs, families, health care, and retirement and how you can fight back. New York: Oxford University Press.

    Google Scholar 

  • Hogarth, J., Beverly, S. G., & Hilgert, M. (February, 2003). Patterns of financial behaviors: Implications for community educators and policymakers. Federal Reserve System Community Affairs Research Conference, pp. 1–22. Retrieved from http://www.federalreserve.gov/communityaffairs/national/CA_Conf_SusCommDev/pdf/hogarthjeanne.pdf

  • Holahan, C. J., Valentiner, D. P., & Moos, R. H. (1994). Parental support and psychological adjustment during the transition to young adulthood in a college sample. Journal of Family Psychology, 8(2), 215–223. Retrieved from http://dx.doi.org.ezp2.lib.umn.edu/10.1037/0893-3200.8.2.215.

    Article  Google Scholar 

  • Johnson, E., & Sherraden, M. (2007). From financial literacy to financial capability among youth. Journal of Sociology and Social Welfare, 34(3), 119–145.

    Google Scholar 

  • Johnston, M. K. (2013). Parental financial assistance and young adults’ relationships with parents and well-being. Journal of Marriage and Family, 75, 713–733. doi:10.1111/jomf.12029.

    Article  Google Scholar 

  • Jorgensen, B. L., & Savla, J. (2010). Financial literacy of young adults: The importance of parental socialization. Family Relations, 59(4), 465–478. doi:10.1111/j.1741-3729.2010.00616.x.

    Article  Google Scholar 

  • Kim, J., & Chatterjee, S. (2013). Childhood financial socialization and young adults’ financial management. Journal of Financial Counseling and Planning, 23, 61–79.

    Google Scholar 

  • Kim, J., LaTaillade, J., & Kim, H. (2011). Family process and adolescents’ financial behaviors. Journal of Family Economic Issues, 32(4), 668–679. doi:10.1007/s10834-011-9270-3.

    Article  Google Scholar 

  • Koonce, J. C., Mimura, Y., Mauldin, T. A., Rupured, A. M., & Jordan, J. (2008). Financial information: Is it related to savings and investing knowledge and financial behavior of teenagers? Journal of Financial Counseling and Planning, 19, 19–28. Retrieved from http://ssrn.com/abstract=2226475.

    Google Scholar 

  • Lee, J. C., & Mortimer, J. T. (2009). Family socialization, economic self-efficacy, and the attainment of financial independence in early adulthood. Longitudinal and Life Course Studies, 1, 45–62.

    PubMed  PubMed Central  Google Scholar 

  • Littrell, J., Brooks, F., Ivery, J., & Ohmer, M. L. (2010). Why you should care about the threatened middle class. Journal of Sociology & Social Welfare, 37(2), 87–113.

    Google Scholar 

  • Lusardi, A., Mitchell, O. S., & Curto, V., (2010). Financial literacy among the young. Journal of Consumer Affairs, 44(2), 358–380. doi:.

    Google Scholar 

  • Marshall, H. R., & Magruder, L. (1960). Relations between parent money education practices and children’s knowledge and use of money. Child Development, 31(2), 253–284. doi:10.2307/1125902.

    PubMed  Google Scholar 

  • Moore-Shay, E. S., & Berchmans, B. M. (1996). The role of the family environment in the development of shared consumption values: an intergenerational study. Advances in Consumer Research, 23, 484–490. Retrieved from http://acrwebsite.org/volumes/7877/volumes/v23/NA-23.

    Google Scholar 

  • Nash, S. G., McQueen, A., & Bray, J. (2005). Pathways to adolescent alcohol use: Family environment, peer influence, and parental expectations. Journal of Adolescent Health, 37, 19–28. doi:10.1016/j.jadohealth.2004.06.004.

    Article  PubMed  Google Scholar 

  • Norvilitis, J. M., & MacLean, M. G. (2010). The role of parents in college students’ financial behaviors and attitudes. Journal of Economic Psychology, 31, 55–63. doi:10.1016/j.joep.2009.10.003.

    Article  Google Scholar 

  • Otto, A., Schots, P. A., Westerman, J. A., & Webley, P. (2006). Children’s use of saving strategies: An experimental approach. Journal of Economic Psychology, 27, 57–72. doi:10.1016/j.joep.2005.06.013.

    Article  Google Scholar 

  • Pew Research Center. (2012). Three in 10 young adults live with parents, highest level since 1950s. Retrieved from http://www.pewsocialtrends.org/2012/03/15/three-in-10-young-adults-live-with-parents-highest-level-since-1950s/

  • Romo, L. S. (2011). Money talks: Revealing and concealing financial information in families. Journal of Family Communication, 11, 264–281. doi:10.1080/15267431.2010.544634.

    Article  Google Scholar 

  • Schreiner, M., & Sherraden, M. (2007). Can the poor save? Saving and asset building in Individual Development Accounts. New York, NY: Transaction.

    Google Scholar 

  • Scodellaro, C., Khlat, M., & Jusot, F. (2012). Intergenerational financial transfers and health in a national sample from France. Social Science & Medicine, 75(7), 1296–1302. doi:10.1016/j.socscimed.2012.04.042.

    Article  Google Scholar 

  • Serido, J., Shim, S., Mishra, A., & Tang, C. (2010). Family environment and its impact on college students’ well-being. Family Relations, 59, 453–464. doi:10.1111/j.1741-3729.2010.00615.x.

    Article  Google Scholar 

  • Serido, J., Shim, S., & Tang, C. (2013). A developmental model of financial capability: A framework for promoting a successful transition to adulthood. International Journal of Behavioral Development, 37(4), 287–297. doi:10.1177/0165025413479476.

    Article  Google Scholar 

  • Settersten, R. A., Jr. (2012). The contemporary context of young adulthood in the USA: From demography to development, from private troubles to public issues. In A. Booth, S. L. Brown, N. S. Lansdale, W. D. Manning, & S. M. McHale (Eds.), Early adulthood in a family context (pp. 3–26). New York, NY: Springer.

    Chapter  Google Scholar 

  • Shanahan, M. J., Mortimer, J. T., & Krüger, H. (2002). Adolescence and adult work in the twenty-first century. Journal of Research on Adolescence, 12(1), 99–120. doi:10.1111/1532-7795.00026.

    Article  Google Scholar 

  • Sherraden, M. (2013). Building blocks of financial capability. In J. Berkenmaier, M. Sherraden, & J. Curley (Eds.), Financial capability and asset development. New York, NY: Oxford University Press.

    Google Scholar 

  • Shim, S., Barber, B. L., Card, N. A., Xiao, J. J., & Serido, J. (2010). Financial socialization of young adults: The role of family, work, and education. Journal of Youth and Adolescence, 39(12), 1457–1470. doi:10.1007/s10964-009-9432-x.

    Google Scholar 

  • Solheim, S. A., Zuiker, V. S., & Levchenko, P. (2011). Financial socialization family pathways: Reflections from college students’ narratives. Family Science Review, 16(2), 97–112. Retrieved from http://www.cgsnet.org/ckfinder/userfiles/files/Financial_Socialization_Reflections_from_College_Students.pdf.

    Google Scholar 

  • Sonuga-Barke, E. J. S., & Webley, P. (1993). Children’s saving: A study in development of economic behavior. Hillsdale, NJ: Lawrence Erlbaum.

    Google Scholar 

  • Varcoe, K., Martin, A., Devitto, Z., & Go, C. (2005). Using a financial education curriculum for teens. Financial Counseling and Planning, 16(1), 63–71. Retrieved from http://ssrn.com/abstract=2255109.

    Google Scholar 

  • Violato, M., Petrou, S., Gray, R., & Redshaw, M. (2011). Family income and child cognitive and behavioural development in the United Kingdom: does money matter? Health economics, 20(10), 1201–1225. doi:10.1002/hec.1665.

    Article  PubMed  Google Scholar 

  • Webley, P., & Nyhus, E. K. (2006). Parents’ influence on children’s future orientation and saving. Journal of Economic Psychology, 27(1), 140–164. doi:10.1016/j.joep.2005.06.016.

    Article  Google Scholar 

  • Whittington, L. A., & Peters, E. H. (1996). Economic incentives for financial and residential independence. Demography, 33, 82–97.

    Article  PubMed  Google Scholar 

  • Wightman, P. D., Patrick, M. E., Schoeni, R. F., & Schulenberg, J. E. (2013, September). Historical trends in parental financial support of young adults. (Population Studies Center Research Report No. 13–801). Retrieved from http://www.psc.isr.umich.edu/pubs/pdf/rr13-801.pdf

  • Xiao, J. J., Chatterjee, S., & Kim, J. (2014). Factors associated with financial independence of young adults. International Journal of Consumer Studies, 38(4), 394–403. doi:10.1111/ijcs.12106.

    Article  Google Scholar 

  • Zhan, M., Anderson, S. G., & Scott, J. (2006). Financial knowledge of the low-income population: Effects of a financial education program. Journal of Sociology and Social Welfare, 33(1), 53–74.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Family Social Science, University of Minnesota Twin Cities, 299B McNeal Hall 1985 Buford Avenue, St. Paul, MN, 55108, USA

    Joyce Serido Ph.D., M.B.A.

  2. Department of Family Social Science, University of Minnesota Twin Cities, 290 McNeal Hall 1985 Buford Avenue, St. Paul, MN, 55108, USA

    Veronica Deenanath Ph.D. (student)

Authors
  1. Joyce Serido Ph.D., M.B.A.
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Veronica Deenanath Ph.D.
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding authors

Correspondence to Joyce Serido Ph.D., M.B.A. or Veronica Deenanath Ph.D. .

Editor information

Editors and Affiliations

  1. Univ of Rhode Island, Transition Center, Department of Human Development and Family Studies,, Kingston, Rhode Island, USA

    Jing Jian Xiao

Rights and permissions

Reprints and permissions

Copyright information

© 2016 Springer International Publishing Switzerland

About this chapter

Cite this chapter

Serido, J., Deenanath, V. (2016). Financial Parenting: Promoting Financial Self-Reliance of Young Consumers. In: Xiao, J. (eds) Handbook of Consumer Finance Research. Springer, Cham. https://doi.org/10.1007/978-3-319-28887-1_24

Download citation

Publish with us

Policies and ethics

Search

Navigation