Like Father Like Son: How Does Parents' Financial Behavior Affect Their Children's Financial Behavior?

This paper investigates the intergenerational influence on financial behavior. Using two national longitudinal studies: the 1979 National Longitudinal Survey Children and Young Adults (NLSCYA) and the 1979 National Longitudinal Survey (NLSY79), we link the financial behavior of 2,520 young adults back to their general self‐control skill and their parents' financial behavior conducted during children's adolescence. We find evidence of intergenerational consistency in financial behavior between parents and their children. Results from the generalized structural equation model indicate that parents' financial behavior affects that of their children both directly and indirectly through general self‐control skill development. Furthermore, the influence of parents is moderated by parent–child relationship. These findings highlight the importance of parental financial socialization. Its implications are discussed.     

Ethnic identity,socialization factors,and culture‐specific consumption behavior

This study is designed to discover the degree to which ethnic identity and socialization factors influence the culture‐specific consumption behaviors of Asian American young adults, in general as well as in specific situational settings. Findings indicated that perceived parental cultural identification tended to strengthen the ethnic identity, which in turn influenced Asian American young adults' culture‐specific consumption behaviors. However, although their perceived parental acculturation level had no effect on their ethnic identity, it directly weakened the subject group's culture‐specific consumption behaviors. The ethnic‐friendship orientation was found not only to influence ethnic identity but also to influence directly the group's culture‐specific consumption behavior. Further analysis revealed that a situational factor (i.e., the presence or absence of ethnic friends) influenced culture‐specific consumption behavior, regardless of the strength of ethnic identity. © 2004 Wiley Periodicals, Inc.     

Impact of Financial Education Mandates on Younger Consumers' Use of Alternative Financial Services

Over one‐quarter of American adults used credit‐based alternative financial services (AFS) in the past five years, which carry a typical APR of 300%. Young adults are especially more likely to use AFS yet are also more likely to be exposed to personal finance education in schools. In this study, I use data from pooled 2012 and 2015 waves of National Financial Capability Study to examine whether state‐mandated financial education impacts young adults' use of AFS. I find that financial education mandates significantly reduced the likelihood and frequency of payday borrowing in particular. Additionally, I show that exposure to required personal finance courses could affect payday borrowing through increased financial literacy and improved financial planning practices. These findings suggest that policymakers and other stakeholders need to understand the full benefits of financial education when making cost–benefit analysis comparisons as to whether or not to implement.     

Testing a Measurement Model of Financial Capability Among Youth in Ghana

Youth may benefit from having enhanced financial knowledge and skills and access to financial services to help them navigate transitions to adulthood, though reliable and valid measures of youth financial capability to help assess financial education and inclusion intervention outcomes are lacking. Using survey responses from 5,451 youth ages 12–18 in Ghana, we used exploratory and confirmatory factor analysis to assess 18 survey items concerning youth financial behavior and understanding and attitudes concerning financial services. A 12‐item, group invariant scale (α = .72) with three latent factors was retained in a well‐fitting model that may help practitioners assess financial education and inclusion outcomes. We found that six items were poor indicators of youth financial capability, possibly because these items measure other constructs like numeracy, or because these items were not sufficiently assessed for developmental and cultural validity using qualitative methods like cognitive interviewing.     

Adolescent consumer decision-making styles: The consumer socialization perspective

This study has attempted to conceptualize the distinct factors that may be said to characterize an adolescent's consumer decision-making style from the perspective of consumer socialization. Eight consumer decision-making styles were proposed to be associated with the influence of socialization agents and antecedent variables (e.g., social structural and developmental variables). Influence of socialization agents was also proposed to be associated with antecedent variables. Survey data (N = 1954) collected from 29 high schools in a southwestern state were examined with the use of a series of stepwise multiple regression analyses. Influence of socialization agents—peers, parents, printed media, TV commercials, and consumer education—clearly played an important role in influencing adolescent consumer decision-making styles. Antecedent variables, especially social structural variables such as gender, ethnicity, main reason for working, and the amount of parental allowance, demonstrated significant correlations with consumer decision-making styles. Antecedent variables, however, were in general found to be only distantly related to the influence of socialization agents. © 1996 John Wiley & Sons, Inc.     

School and family environments promote adolescents' financial confidence: Indirect paths to financial literacy skills in Finnish PISA 2018

This study investigates the associations of adolescents' financial socialization factors—financial education in school and families—with financial confidence (i.e., confidence in using financial and digital financial services). In addition, we examine how financial socialization factors indirectly relate to financial literacy skills through financial confidence and the role of demographic factors (adolescent gender, grade level, parental education, family wealth) on financial socialization, financial confidence, and financial literacy scores. We used data on the 4328 Finnish 15-year-olds participating in the 2018 Programme for International Student Assessment (PISA). We measured financial literacy by cognitive test items and assessed financial socialization and financial confidence by adolescent questionnaires. First, the results showed that financial education in school positively predicted adolescents' confidence in using financial and digital financial services. Second, financial education at schools and in families indirectly predicted students' financial literacy through confidence in using digital financial services. Third, older adolescents were more exposed to financial education at school and in families, whereas adolescents from wealthier families and girls (vs. boys) were exposed to a more frequent discussion of financial matters with parents at home. Furthermore, the boys were more confident in using financial services than the girls, although the financial literacy score did not differ by gender; older adolescents were more confident in using financial services and achieved better financial literacy than younger ones. Finally, higher parental education in the family related to higher financial literacy but not to higher financial confidence, whereas family wealth was related to higher financial confidence but not financial literacy.     

A processual theory of green identity formation: the case of young environmentalists in Australia

Using image‐elicited, depth interviews, this qualitative study explores green consumption practices among 20 young environmentalists, aged between 18 and 25 years, in an Australian city with a view to examine how various identity formations reside in their narratives. The study's findings strongly support the applicability of Cherrier and Murray's four‐stage processual theory of identity (sensitization, separation, socialization, striving) to understand young environmentalist's formation of a green identity. The study also develops an emergent processual theory of green identity formation, which encompasses four main stages of control, create, compromise and customize. Each stage corresponds to how the young environmentalists position and negotiate their formative green identities, including first enacting control about their identity; creating their new identity in relation to existing green identity projects; compromising their new identity as it is practiced and socialized in their lives; and finally, customizing their identity as they frame, situate and align personal, social and cultural influences about consumption and their identity. The findings inform green policy makers and institutions working towards building a green consumer society involving young consumers.     

The Financial Knowledge Scale: An Application of Item Response Theory to the Assessment of Financial Literacy

Despite increasing interest in and funding for financial literacy and financial education programs in the private and public sectors, the field of financial literacy still has a major obstacle to overcome: the lack of a widely disseminated measure of financial literacy, developed through rigorous psychometric analyses. In this article, we develop such a measure, focusing specifically on financial knowledge. Using item response theory (IRT), we analyze items from three national surveys, resulting in a psychometrically sound 20‐item financial knowledge scale. By using IRT, the current analysis uses individuals' answers to inform which questions to include in the scale in the first place, rather than simply confirming relationships between these answers and other financially relevant outcomes post hoc. Widespread use of this index and the continued use of modern psychometric techniques would allow for the comparison of financial knowledge, measured consistently and reliably, across studies, populations, and programs.     

Problem‐Solving Orientations,Financial Self‐Efficacy,and Student‐Loan Repayment Stress

Using data acquired from a four‐time longitudinal survey, we tested a model linking two measures of self‐agency, i.e., problem‐solving orientations and financial self‐efficacy, to student‐loan repayment stress. Of those participants who responded at Wave 4 (N = 855) of a longitudinal study, 396 who had acquired student loans were included in our structural equation model's Mplus analysis. After we controlled for gender, college financial education, ethnicity, and participant annual income, we found that both financial self‐efficacy and negative problem‐solving orientation were related to perceived difficulty. More specifically, those participants with a greater financial self‐efficacy at Wave 4 perceived less difficulty in paying off their loans, while those with a more negative problem‐solving orientation perceived more difficulty in paying off their loans. We also found perceived difficulty to be directly related to the actual difficulty of repaying a loan, and this perceived difficulty was, in turn, associated with loan‐specific stress. We provide implications for financial education.     

Emerging adults' financial capability: A financial socialization perspective

This exploratory qualitative research uses the United Kingdom as a case study to understand how past and present financial socialization agents have either enhanced or inhibited emerging adults' financial capability in order to highlight potential opportunities for future policy and practice interventions. Three primary socialization agents were identified. The family as trusted primary advisor continues well into adulthood, even where family financial capability may be low. Beyond this, emerging adults only reluctantly engage with their bank, rely on just‐in‐time experiential learning or self‐socialize via diving, often with false confidence, into the internet. Although there are many quantitative studies on financial socialization, this paper fills a gap by taking a deeply qualitative approach showing, for the first time, empirically highlighting the limited number of financial socialization agents through the voices of emerging adults. The findings contradict previous socialization research that suggests parental socialization reduces into adulthood.     

Investigating the Disconnect between Financial Knowledge and Behavior: The Role of Parental Influence and Psychological Characteristics in Responsible Financial Behaviors among Young Adults

Financial knowledge is an essential component in financial decision making; however, knowledge is insufficient to ensure responsible financial behavior. We investigate the weak association between financial knowledge and behavior by simultaneously testing the roles financial knowledge, parental influence, and individual psychological characteristics (self‐discipline and thoroughness) play in young adults' financial behaviors. Results from 2,712 respondents from the 1997 National Longitudinal Survey of Youth confirm there is a weak association between financial knowledge and behavior. Parental influence and self‐discipline positively associate with responsible financial behavior. We also investigate the moderating role of gender and observe that financial knowledge and parental influence improve women's financial behavior more than men, whereas being thorough has a larger impact among males. These findings suggest that considering social and individual psychological factors in financial education programs could improve program efficiency. The results also highlight the importance of adopting tailored financial education to suit gender differences.     

Adolescents' perceptions of family communication patterns and some aspects of their consumer socialization

This study examined the effects of family communication patterns (FCP) on adolescent consumers' decision‐making styles and influence in family purchase decisions. Two underlying dimensions of FCP (concept‐orientation and socio‐orientation) were measured separately for mother–child communication and father–child communication and regressed on adolescents' use of the selected decision‐making styles and influence in purchase decisions involving durable products and nondurable products for their own use. Results show that only mother–child communication patterns have significant associations with adolescents' decision‐making styles and family purchase influence. Specifically, mothers' concept‐oriented communication was positively linked to children's use of utilitarian decision‐making styles (e.g., careful and deliberate decision making) and social/conspicuous decision‐making styles (e.g., recreational and hedonic decision making) as well as to children's influence in family purchase decisions involving both durable and nondurable products for themselves. On the other hand, mothers' socio‐oriented communication was linked positively to children's use of undesirable decision‐making styles (e.g., confusion by overchoice) and negatively to children's influence in family purchase decisions. This study also investigated the presence (or absence) of a same‐gender effect in the relationships between parent–child communication orientations and children's consumer socialization outcome. If present, a same‐gender effect would be indicated by a greater influence from the same‐sex parent's communication orientations on the adolescent's decision‐making styles and influence in family decisions relative to that of the opposite‐‐ sex parent's communication orientations. Comparisons of the two gender‐group regression results revealed no systematic pattern that suggests the presence of such an effect. © 2009 Wiley Periodicals, Inc.     

Financial socialization's impact on investment orientation and household net worth

This study investigates the role of financial socialization for investment orientation and household net worth. Combining consumer socialization literature with findings in the behavioural finance literature, survey data were analysed to (1) investigate the relationship among household net worth, financial socialization, indicators of investment orientation and socio-demographic investor characteristics; (2) examine the influence of socio-demographic investor characteristics and financial socialization on indicators of investment orientation; and (3) test whether financial socialization affects household wealth above and beyond socio-demographic and investment orientation factors. Parents emerged as a relevant socialization agent of investors, influencing investment regularity and household net worth above and beyond other factors. This result extends earlier findings about parents' role for a person's financial management and savings behaviour to the investment context. Based on our findings, educators may want to involve parents in their efforts. They may want to emphasize the importance of starting investing regularly at an early age and of continuing to increase involvement in investing over the years. Financial planners and financial counsellors may consider emphasizing these two practices for their clients and involve children of their clients when and where appropriate.     

Consumer socialization,social structural factors and decision‐making styles: a case study of adolescents in Malaysia

The purpose of this study is to investigate how the process of consumer socialization will determine adolescents’ decision‐making styles. Eight decision‐making styles were conceptualized as outcomes of the socialization process, which is acquired via interaction with socialization agents, namely parents, peers, printed media, television commercials and in‐school education. The study also proposed five social structural variables (social class, gender, ethnicity, residence and religion) as being associated with the socialization agents and decision‐making styles. The study sample consisted of 934 adolescents between the ages of 16 and 19 years. The data were collected using a self‐administered questionnaire and analysed with the SPSS computer program. As a result of regression analyses, significant relationships were found between social structural factors and socialization processes, suggesting that the influence of socialization agents on adolescents may vary according to certain demographic characteristics. Significant relationships were also found between social structural factors and socialization processes. Peers appeared to be the most important agents of consumer socialization, contributing to a variety of desirable as well as undesirable consumer decision styles. Printed media and television commercials were also found to be significant sources of the acquisition of both desirable and undesirable decision‐making styles. Parents and in‐school education, however, were insignificant in the acquisition of any decision‐making styles among adolescents. Information obtained from this study could be useful to government agencies and consumer educators. The most revealing finding of this study is that parents did not contribute to the formulation of decision‐making orientation for adolescents. This points to the need for consumer educators to take steps in designing programmes that will involve parents as primary socialization agents at home; this may be facilitated via printed materials. Apart from this, the information can also be helpful in enabling marketers to be more effective in targeting various adolescent markets by formulating marketing strategies according to demographic factors, socialization process and decision‐making styles.     

Assessing the Effectiveness of Financial Coaching: Evidence from the Boston Youth Credit Building Initiative

Since the 2008 financial crisis, there has been renewed interest in providing financial education to improve consumer financial decision making, especially among youth. Using a randomized controlled trial, we estimate the causal effects of a financial coaching program for young adults from linked individual‐level administrative credit reports and self‐reported survey responses. Within six months, the treatment group was 10 percentage points more likely to have access to credit compared to the control group. After 18 months, the average credit score was 26 points higher for the treatment group versus the control group, raising the likelihood of achieving a “good” credit rating by 8 percentage points. Consequently, the treatment group was less likely to rely on alternative financial services and paid lower interest rates on car loans. These impacts are largely driven by improvements in self‐efficacy, offering important insights for policymakers seeking to incorporate financial education into youth workforce development programs.     

Financial Knowledge and “Don't Know” Response

We investigate the effect of group characteristics and educational interventions on young respondents' objective financial knowledge level. We examine six questions about personal finance and covariates selected from the 2015 National Financial Capability Study. Because these questions include “Don't Know” or “Refuse” (DK/RF) responses, a simple regression model could cause researchers to reach misleading conclusions if DK/RF responses are not random. Thus, we suggest a binomial‐latent regression model to evaluate the effect of educational interventions and group differences that are hidden in DK/RF responses. The estimation result shows that rejecting financial education opportunities is disadvantageous to obtaining proper financial knowledge. In addition, both formal and informal financial education are less effective in improving objective financial knowledge in our preferred model. We also find few or no gender, income, and age differences in young adults' objective financial knowledge level after controlling for financial education interventions.     

High School Economic Education and Access to Financial Services

This study provides a long-term assessment of economic education by examining an individual's decision to have a bank account. Using the results of a nationwide telephone survey, high school courses in economics and business reduced the probability that an adult was unbanked, ceteris paribus. In addition, adults who demonstrated a higher level of understanding of basic economic concepts were less likely to be unbanked. The results indicated that an individual's understanding of the economic system was as important as formal coursework in explaining access to basic financial services.     

金融资产分类会计政策选择的现状与动机--基于金融行业上市公司的数据分析

本文选取43家金融行业上市公司2007至2012年的年报数据作为研究样本,针对权益和债券两大类金融资产的分类展开研究,以契约论为基础,考虑金融资产规模、现金流及盈利状况等因素的影响,发现金融资产规模对金融资产分类的影响在金融行业并不成立,与政治动因、债务契约、现金流等因素的影响显著相关。     

Impact of family income in early life on the financial independence of young adults: Evidence from a matched panel data

This study investigates whether the family income level in early life influences the financial independence of young adults. Using a large nationally representative U.S. sample (constructed based on the data from the 1999 to 2015 Panel Study of Income Dynamics, its 2009 to 2015 Transition to Adulthood Supplement and its 1997 to 2007 Child Development Supplement), we find that the relationship between one's family income level during adolescence and the financial independence of young adults follows an inverted U‐shape. We find that the college graduation status plays an important role in determining the financial independence of young adults. Once young adults graduate from the college, their financial independence is no longer influenced by their family income level during adolescence. The results show similar patterns after controlling for cognitive and noncognitive abilities and financial behaviours of young adults when they were children or teenagers. The findings of this study have significant implications for policymakers and educators.     

Financial Literacy as More than Knowledge: The Development of a Formative Scale through the Lens of Bloom's Domains of Knowledge

For well over a decade, financial literacy has been a primary lens through which researchers approach financial education. Unfortunately, in most cases, this potentially rich construct is reduced to mere financial knowledge. This myopic conceptualization hampers the development of the concept and programs to build financial literacy. Despite research that reveals these limits, the field has either persisted with this narrow definition of financial literacy or abandoned the model altogether in favor of capability or similar constructs. Using Bloom's domains of knowledge, we redefine financial literacy as the combination of three different indicators reflecting three domains of knowledge: financial skill, self‐efficacy, and explicit knowledge. Using data from a national survey, we apply the methods of formative scale development to construct and validate a more robust conceptualization and measurement of financial literacy. We explore how this financial literacy index might inform development of innovative financial education programs.