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Parental transfer of financial knowledge and later credit outcomes among low- and moderate-income homeowners

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  • Grinstein-Weiss, Michal
  • Spader, Jonathan
  • Yeo, Yeong Hun
  • Taylor, Andréa
  • Books Freeze, Elizabeth

Abstract

It is well established that acquiring financial skills during childhood is linked with better savings in adulthood. Little is known, however, about the relationship between parental teaching of money management early in life and children's financial outcomes in adulthood. This is particularly true for low- and moderate-income (LMI) households. Using data from Community Advantage Program survey data for 2,389 LMI homeowners, we find that adults who report receiving high levels of money-management teaching in childhood from their parents are associated with higher credit scores and lower credit card debt in adulthood. We also find that the level of parental financial teaching influences the relationship between children's later educational attainment and credit scores. These findings suggest implications for initiatives promoting financial capability for parents and children.

Suggested Citation

  • Grinstein-Weiss, Michal & Spader, Jonathan & Yeo, Yeong Hun & Taylor, Andréa & Books Freeze, Elizabeth, 2011. "Parental transfer of financial knowledge and later credit outcomes among low- and moderate-income homeowners," Children and Youth Services Review, Elsevier, vol. 33(1), pages 78-85, January.
  • Handle: RePEc:eee:cysrev:v:33:y:2011:i:1:p:78-85
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    1. repec:kap:jfamec:v:39:y:2018:i:2:d:10.1007_s10834-017-9556-1 is not listed on IDEAS
    2. Terri Friedline & Mary Rauktis, 2014. "Young People Are the Front Lines of Financial Inclusion: A Review of 45 Years of Research," Journal of Consumer Affairs, Wiley Blackwell, vol. 48(3), pages 535-602, October.
    3. Sonya L. Britt, 2016. "The Intergenerational Transference of Money Attitudes and Behaviors," Journal of Consumer Affairs, Wiley Blackwell, vol. 50(3), pages 539-556, November.
    4. Brown, Sarah & Taylor, Karl, 2016. "Early influences on saving behaviour: Analysis of British panel data," Journal of Banking & Finance, Elsevier, vol. 62(C), pages 1-14.
    5. Terri Friedline, 2015. "A Developmental Perspective on Children's Economic Agency," Journal of Consumer Affairs, Wiley Blackwell, vol. 49(1), pages 39-68, March.
    6. Geert Van Campenhout, 2015. "Revaluing the Role of Parents as Financial Socialization Agents in Youth Financial Literacy Programs," Journal of Consumer Affairs, Wiley Blackwell, vol. 49(1), pages 186-222, March.
    7. Friedline, Terri & Elliott, William & Chowa, Gina A.N., 2013. "Testing an asset-building approach for young people: Early access to savings predicts later savings," Economics of Education Review, Elsevier, vol. 33(C), pages 31-51.
    8. Terri Friedline & Stacia West, 2016. "Financial Education is not Enough: Millennials May Need Financial Capability to Demonstrate Healthier Financial Behaviors," Journal of Family and Economic Issues, Springer, vol. 37(4), pages 649-671, December.
    9. David W. Eccles & Paul Ward & Elizabeth Goldsmith & Guler Arsal, 2013. "The Relationship between Retirement Wealth and Householders' Lifetime Personal Financial and Investing Behaviors," Journal of Consumer Affairs, Wiley Blackwell, vol. 47(3), pages 432-464, November.

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