Parental Financial Socialisation of Young Black African Adults in South Africa

Abstract

Purpose: Parental financial socialisation is necessary to help young adults to effectively manage their finances and improve their financial well-being. This study examined parental financial socialisation of young black African adults by their parents in rural and low-income area in South Africa. Design/methodology/approach: Parental financial socialisation was measured through parental financial behaviour, parental financial monitoring, parental financial discussions, parental financial communications, and parental financial teaching. This study adopted quantitative research approach and self-administered questionnaire to collect data from young black African adults in Fetakgomo Tubatse and Intsika Yethu municipalities because these municipalities are the most rural and low-income areas in South Africa. Descriptive statistics were used to analyse data. The composite score was calculated to determine parental financial socialisation. Findings: The overall score of Parental financial socialisation was 53%, which is moderate. Thus, young black African adults are financially socialised by their parents. This result was surprising as parents in rural and low-income areas uphold cultural norms and values and consider discussing certain issues like money with children a taboo. Research limitations/implications: Due to the low levels of general literacy among the respondents, which negatively affected data collection; some young adults did not understand the questionnaire and withdrew from participating in the study. Furthermore, even though confidentiality and anonymity were guaranteed, respondents were reluctant to participate in the study. They feared exposing their financial position and displayed a lack of trust. Originality/value: This study is the first to investigate parental financial socialisation of young black African adults in rural and low-income area in South Africa. This study concluded by providing recommendations and suggestions for future research.