From Family Systems to Financial Outcomes: Role of Parental Financial Socialization

This article synthesizes the impact of parental financial socialization on an individual’s financial behavior. To better understand the role of parental financial socialization, 219 peer-reviewed articles from the Scopus database were analysed. A combination of bibliometric and thematic analysis was used, resulting in four major themes: (1) Mechanisms of parental and family financial socialization, (2) Financial outcomes from family financial socialization, (3) Psychological Mediators of Socialization Effects, and (4) Socio-Cultural and Institutional Contexts as Moderators. Findings of this study reveal that parental modeling, communication, psychology, socio-cultural, and institutional context are key mechanisms in the development of financial norms and competencies. The study also confirms the relevance of the Social Learning Theory, Family Systems Theory, Theory of Planned Behavior, Financial Capability Theory, and Life Course Perspective Theory. The contributions of this study include the development of a multi-level model that identifies family, psychological, and institutional determinants of financial behavior and proposes areas for future research in different cross-cultural contexts. From a practical perspective, this study highlights the importance of integrating the factors mentioned above into policy interventions by regulators and all stakeholders.