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Teaching children to save: What is the best strategy for lifetime savings?

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  • Bucciol, Alessandro
  • Veronesi, Marcella

Abstract

We study the effect of alternative parental teaching strategies on the propensity to save and the amount saved during adulthood. Using a panel dataset from the Dutch DNB Household Survey we find that parental teaching to save increases the likelihood that an adult will save by 16%, and the saving amount by about 30%. The best strategy involves a combination of different methods (giving pocket money, controlling money usage, and giving advice about saving and budgeting). The effect of parental financial socialization is persistent with age, but decays at elder age for the propensity to save.

Suggested Citation

  • Bucciol, Alessandro & Veronesi, Marcella, 2014. "Teaching children to save: What is the best strategy for lifetime savings?," Journal of Economic Psychology, Elsevier, vol. 45(C), pages 1-17.
    • Handle: RePEc:eee:joepsy:v:45:y:2014:i:c:p:1-17
    DOI: 10.1016/j.joep.2014.07.003
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    More about this item

    Keywords

    Saving; Teaching to save; Children; Pocket money; Financial socialization;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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