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Family Financial Socialisation and its Impact on Financial Confidence, Intentions, and Behaviours among New Zealand Adolescents

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Abstract

This study investigated the impact of family financial socialisation on the financial perceptions and behaviours of adolescents. Drawing from social learning theory, Gudmunson and Danes’ model of family financial socialisation, and the theory of planned behaviour, we examined the influence of family affluence, financial anxiety, and values on adolescents’ financial confidence, intentions, and behaviours. The research also explores gender differences and the distinct effects of family socialisation in banking and budgeting contexts. With a large sample of adolescents in New Zealand (n = 5,370), results using structural equation modelling reveal that family affluence corresponds with a higher perception of family financial anxiety and a stronger emphasis on financial values on savings. We highlight the significant role of family financial values in shaping adolescents’ general confidence in money management, which influences their confidence in specific financial domains. Our results also highlight a gap between confidence and action in financial behaviours, with gender differences impacting this dynamic. The findings offer insights for parents, policymakers, and financial institutions, emphasising the importance of family financial socialisation in fostering responsible financial practices among young people.

Suggested Citation

  • Steve Agnew & Valerie A. Sotardi2, 2024. "Family Financial Socialisation and its Impact on Financial Confidence, Intentions, and Behaviours among New Zealand Adolescents," Working Papers in Economics 24/05, University of Canterbury, Department of Economics and Finance.
    • Handle: RePEc:cbt:econwp:24/05
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    File URL: https://repec.canterbury.ac.nz/cbt/econwp/2405.pdf
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    References listed on IDEAS

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    1. Clinton Gudmunson & Sharon Danes, 2011. "Family Financial Socialization: Theory and Critical Review," Journal of Family and Economic Issues, Springer, vol. 32(4), pages 644-667, December.
    2. Annamaria Lusardi & Olivia S. Mitchell, 2008. "Planning and Financial Literacy: How Do Women Fare?," American Economic Review, American Economic Association, vol. 98(2), pages 413-417, May.
    3. Sigrid Luhr, 2018. "How Social Class Shapes Adolescent Financial Socialization: Understanding Differences in the Transition to Adulthood," Journal of Family and Economic Issues, Springer, vol. 39(3), pages 457-473, September.
    4. Bryce L. Jorgensen & David B. Allsop & Samuel D. Runyan & Brandan E. Wheeler & David A. Evans & Loren D. Marks, 2019. "Forming Financial Vision: How Parents Prepare Young Adults for Financial Success," Journal of Family and Economic Issues, Springer, vol. 40(3), pages 553-563, September.
    5. Antonia Grohmann, 2016. "The Gender Gap in Financial Literacy: Income, Education, and Experience Offer Only Partial Explanations," DIW Economic Bulletin, DIW Berlin, German Institute for Economic Research, vol. 6(46/47), pages 531-537.
    6. Justus Blaschke, 2022. "Gender differences in financial literacy among teenagers - Can confidence bridge the gap?," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2144328-214, December.
    7. Lusardi, Annamaria & Mitchell, Olivia S., 2011. "Financial literacy around the world: an overview," Journal of Pension Economics and Finance, Cambridge University Press, vol. 10(4), pages 497-508, October.
    8. Ashley B. LeBaron & Heather H. Kelley, 2021. "Financial Socialization: A Decade in Review," Journal of Family and Economic Issues, Springer, vol. 42(1), pages 195-206, July.
    9. Rosseel, Yves, 2012. "lavaan: An R Package for Structural Equation Modeling," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 48(i02).
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    11. Fisher, Patti J. & Yao, Rui, 2017. "Gender differences in financial risk tolerance," Journal of Economic Psychology, Elsevier, vol. 61(C), pages 191-202.
    12. Charness, Gary & Gneezy, Uri, 2012. "Strong Evidence for Gender Differences in Risk Taking," Journal of Economic Behavior & Organization, Elsevier, vol. 83(1), pages 50-58.
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    More about this item

    Keywords

    family socialisation; financial socialisation; adolescents; affluence; confidence;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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