Family Financial Socialization and Its Impact on Financial Decision-Making: A Systematic Review Key Behavioral Theories
Main Article Content
Abstract
This study examines the influence of family financial socialization on the financial behavior of the younger generation by exploring both direct and indirect mechanisms through which parents shape financial outcomes. While prior studies have largely focused on explicit parental instruction and implicit role modeling, this research provides a more comprehensive analysis by incorporating psychological and social factors that mediate this relationship. A systematic literature review was conducted on 39 peer-reviewed articles published in reputable journals, employing a structured screening and analysis process. The findings reveal that family financial socialization significantly affects young adults’ financial literacy, attitudes, and behavioral patterns. Both explicit practices, such as financial guidance and discussions, and implicit practices, including observational learning, play a critical role in shaping responsible financial behavior. Moreover, psychological factors, such as self-control, financial attitudes, and risk perception, were found to moderate the relationship between family financial socialization and financial decision-making. These results highlight the importance of family-based financial education in promoting sustainable financial behavior among young adults.
Downloads
Article Details
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
References
Abdul Ghafoor, K., & Akhtar, M. (2024). Parents’ financial socialization or socioeconomic characteristics: which has more influence on Gen-Z’s financial wellbeing? Humanities and Social Sciences Communications, 11(1). https://doi.org/10.1057/s41599-024-03007-3
Addi-Raccah, A. (2024). The role of digital capital in parental engagement. Education and Information Technologies, 29(13), 16901–16928. https://doi.org/10.1007/s10639-024-12455-y
Agnew, S., & Sotardi, V. A. (2025). Family Financial Socialisation and its Impact on Financial Confidence, Intentions, and Behaviours among New Zealand Adolescents. Journal of Family and Economic Issues, 46(1), 246–258. https://doi.org/10.1007/s10834-024-09990-8
Alshebami, A. S., & Aldhyani, T. H. H. (2022). The Interplay of Social Influence , Financial Literacy , and Saving Behaviour among Saudi Youth and the Moderating Effect of Self-Control. July. https://doi.org/10.3390/su14148780
Antoni, X. (2023). THE role of family structure on financial socialiSation techniques and behaviour of students in the Eastern Cape , South Africa socialiSation techniques and behaviour of students in the Eastern Cape , South Africa. Cogent Economics & Finance, 11(1). https://doi.org/10.1080/23322039.2023.2196844
Bowen, D. E., & Ostroff, C. (2004). Understanding HRM-firm performance linkages: The role of the “strength” of the HRM system. Academy of Management Review, 29(2), 203–221. https://doi.org/10.5465/AMR.2004.12736076
Burcher, S. A., Serido, J., Danes, S., Rudi, J., & Shim, S. (2021). Using the Expectancy-Value Theory to Understand Emerging Adult’s Financial Behavior and Financial Well-Being. Emerging Adulthood, 9(1), 66–75. https://doi.org/10.1177/2167696818815387
Chawla, D., Bhatia, S., & Singh, S. (2022). Parental influence, financial literacy and investment behaviour of young adults. Journal of Indian Business Research, 14(4), 520–539. https://doi.org/10.1108/JIBR-10-2021-0357
Chlosta, S., Patzelt, H., Klein, S. B., & Dormann, C. (2012). Parental role models and the decision to become self-employed: The moderating effect of personality. Small Business Economics, 38(1), 121–138. https://doi.org/10.1007/s11187-010-9270-y
Cho, E. Y. (2024). A qualitative investigation of financial decision-making and enabling factors among ethnic minority young adults in Hong Kong. Humanities and Social Sciences Communications. https://doi.org/10.1057/s41599-024-03605-1
Cho, H., Choi, S., & Kwon, D. H. (2024). Employee Characteristics and Corporate Risk-Taking: Focusing on Tenure. Asia-Pacific Journal of Financial Studies, 53(3), 282–303. https://doi.org/10.1111/ajfs.12465
Deenanath, V., Danes, S. M., & Jang, J. (2019). Purposive and unintentional family financial socialization, subjective financial knowledge, and financial behavior of high school students. Journal of Financial Counseling and Planning, 30(1), 83–96. https://doi.org/10.1891/1052-3073.30.1.83
Fan, L., & Lee, J. M. (2022). Young adults ’ financial advice-seeking behavior : The roles of parental financial socialization. April 2021, 1226–1246. https://doi.org/10.1111/fare.12625
Fletcher, M., & Wright, R. (2024). Sowing seeds: The impact of financial socialization on the financial understanding of young children and preschoolers. Journal of Consumer Affairs, 58(3), 763–793. https://doi.org/10.1111/joca.12593
Goyal, K. (2023). The direct and indirect effects of financial socialization and psychological characteristics on young professionals ’ personal financial management behavior. https://doi.org/10.1108/IJBM-09-2022-0419
Grohmann, A. (2017). Financial Literacy and Financial Behavior: Evidence from the Emerging Asian Middle Class. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3084021
Horsburgh, J., & Ippolito, K. (2018). A skill to be worked at: Using social learning theory to explore the process of learning from role models in clinical settings. BMC Medical Education, 18(1), 1–8. https://doi.org/10.1186/s12909-018-1251-x
Jalili, R., Gilani, N., Najafi, B., Gordeev, V. S., & Doshmangir, L. (2025). Health financial resilience in individuals and households : a scoping review of components , strategies and outcomes.
Kim, K. T., & Lee, J. (2024). Unlocking Financial Well-Being for People With Disabilities : The Importance of Financial Knowledge and Socialization Within the Family Context. June, 1–13. https://doi.org/10.1177/21582440241253564
LeBaron, A. B., Holmes, E. K., Jorgensen, B. L., & Bean, R. A. (2020). Parental Financial Education During Childhood and Financial Behaviors of Emerging Adults. Journal of Financial Counseling and Planning, 31(1), 42–54. https://doi.org/10.1891/JFCP-20-00021
Legenzova, R., & Leckė, G. (2025). The Link between Family Financial Socialization in Adulthood and Investment Literacy of P2P Investors. Journal of Family and Economic Issues, 46(2), 525–544. https://doi.org/10.1007/s10834-024-09962-y
Liang, M., Chen, Q., & Zhou, Y. (2022). The Influence of Various Role Models on Children’s Pro-environmental Behaviours. Frontiers in Psychology, 13(May). https://doi.org/10.3389/fpsyg.2022.873078
Lim, B., Heng, J., Ali, R., & Ni, S. W. (2025). Exploring the Family Financial Socialisation Model in Determining the Financial Well-Being of Employees From the Private Sector in Klang Valley. 34, 268–297.
Mariela, S., Chiluiza, K., & Everaert, P. (2022). education sciences Design and Evaluation among Young Adults of a Financial Literacy Scale Focused on Key Financial Decisions.
Muat, S., Shahnaz, N., Mohd, M., & Abd, E. (2025). How Do Family Financial Socialization and Financial Literacy Dimensions Shape the Financial Well ‑ Being of Indonesian Millennials ? A Serial Mediation Analysis. Journal of Family and Economic Issues, 46(3), 867–886. https://doi.org/10.1007/s10834-025-10047-7
Ndou, A., & Godi, N. J. (2025). Moderating effects of parental income on the relationship between parental financial discussions and financial literacy of young adults. September. https://doi.org/10.1108/IJSE-07-2024-0622
Phung, T. M. T., Tran, Q. N., Nguyen-Hoang, P., Nguyen, N. H., & Nguyen, T. H. (2023). The role of learning motivation on financial knowledge among Vietnamese college students. Journal of Consumer Affairs, 57(1), 529–563. https://doi.org/10.1111/joca.12511
Rea, J. K., Danes, S. M., Serido, J., Borden, L. M., & Shim, S. (2019). “ Being Able to Support Yourself ”: Young Adults ’ Meaning of Financial Well-Being Through Family Financial Socialization. Journal of Family and Economic Issues, 40(2), 250–268. https://doi.org/10.1007/s10834-018-9602-7
Riaz, S., Khan, H. H., Sarwar, B., Ahmed, W., Muhammad, N., Reza, S., Muhammad, S., & Ul, N. (2022). Influence of Financial Social Agents and Attitude Toward Money on Financial Literacy : The Mediating Role of Financial Self-Efficacy and Moderating Role of Mindfulness. https://doi.org/10.1177/21582440221117140
Saeed, R., Munir, H. M., Lodhi, R. N., Riaz, A., & Iqbal, A. (2014). Capital structure and its determinants: empirical evidence from Pakistan’s pharmaceutical firms. Journal of Basic and Applied Scientific Research, Vol. 4 No., 115–125.
Silinskas, G., Ahonen, A. K., & Wilska, T. A. (2021). Financial literacy among Finnish adolescents in PISA 2018 : the role of financial learning and dispositional factors. Large-Scale Assessments in Education. https://doi.org/10.1186/s40536-021-00118-0
Sinnewe, E., & Nicholson, G. (2023). Healthy financial habits in young adults : An exploratory study of the relationship between subjective financial literacy , engagement with finances , and financial decision-making. March 2022, 564–592. https://doi.org/10.1111/joca.12512
Soppe, A. (2004). Sustainable corporate finance. Journal of Business Ethics, 53(1–2), 213–224. https://doi.org/10.1023/B:BUSI.0000039410.18373.12
Subramanian, R. (2024). Do Explicit and Implicit Parental Financial Socialization Influence Students’ Financial Literacy? Evidence from India. October, 24–39.
Szendrey, J. M., & Fiala, L. A. (2025). Family Frugality Scale: Development, Validation, and Usage of an Implicit Financial Socialization Modeling Measure. 36(1), 85–97.
Tang, P., Zhou, N., Cao, H., Aamir, M., & Xiaomin, K. (2025). Parental Financial Socialization and Youth Subsequent Victimization of Intimate Partner Abuse : The Roles of Youth ’ s Financial Behaviors and Friends ’ Financial Socialization. Journal of Family and Economic Issues, 46(3), 887–899. https://doi.org/10.1007/s10834-025-10048-6
Xu, H., Song, K., Li, Y., & Ankrah Twumasi, M. (2023). The Relationship between Financial Literacy and Income Structure of Rural Farm Households: Evidence from Jiangsu, China. Agriculture (Switzerland), 13(3). https://doi.org/10.3390/agriculture13030711
Zhao, P., Bazarova, N. N., & Valle, N. (2023). Digital parenting divides : the role of parental capital and digital parenting readiness in parental digital mediation.
Zupančič, M., Poredoš, M., & Lep, Ž. (2023). Intergenerational Model of Financial Satisfaction and Parent-Child Financial Relationship. Journal of Social and Personal Relationships, 40(8), 2568–2591. https://doi.org/10.1177/02654075231153352