Linking Family Financial Socialization With Its Proximal and Distal Outcomes: Which Socialization Dimensions Matter Most for Emerging Adults’ Financial Identity,Financial Behaviors,and Financial Anxiety?

Abstract

Financial behaviors are grounded in family financial socialization, and its effects continue well into people’s life course. However, only a handful of studies have addressed dimensionality of family financial socialization practices. Even fewer studies have investigated how different dimensions of financial socialization are linked to financial identity and distal outcomes such as financial behaviors and anxiety. To address this gap, a cross-sectional study was conducted with 481 emerging adults (57.8% women; M _age = 20.27, SD _age = 1.39). The results suggest that family financial socialization practices are multidimensional and that they have different effects on the outcomes. Specifically, direct parental teaching on money management and openness about family finances are related to favorable outcomes (i.e., higher spending self-control, less impulsive buying, and lower financial anxiety), while experiencing financial distress within a family is related to less favorable outcomes. The results also suggest that financial identity may play an essential role in this process.

Keywords

financial socialization emerging adulthood family relationships identity financial behaviors

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