THE INFLUENCE OF PARENTAL FINANCIAL SOCIALIZATION ON YOUNG BLACK AFRICAN ADULTS’ FINANCIAL BEHAVIOR

Abstract

Parental financial socialization is becoming increasingly important globally due to poor financial behavior amongst young adults, especially those in developing countries and rural and lowincome areas. This study makes a unique contribution to the body of knowledge by investigating the relationship between parental financial socialization and financial behavior. Using a quantitative research approach, parental financial socialization was extended through parental financial teaching, discussions, monitoring, and financial modeling. We collected a selfadministered questionnaire from young black African adults in two low-income and rural areas in South Africa (Intsika Yethu and Fetakgomo Tubatse municipalities) and showed a significant positive relationship between parental financial teaching, parental financial discussions, and financial behavior. Results revealed that parental financial discussions had a significant and positive relationship with financial behavior, while parental financial monitoring was adversely associated with financial behavior. Finally, findings demonstrated that parental financial modeling had no relationship with financial behavior. The results suggest that parents should teach and discuss financial matters with young adults to improve financial behavior. Also, financial educators should design financial education programs to assist parents in improving their financial behavior to transfer responsible financial behavior to young adults.