Parents

In a recent article, Dr. Ashley LeBaron-Black and colleagues[1] explored the association between parental financial education during a child's upbringing and the financial wellbeing of those children as they transition into emerging adulthood.   

If you’ve read anything on this website, you’ve learned that parents have a significant impact on their child’s thoughts, beliefs and behaviors surrounding money. Even emerging adults report how their parents’ actions are still impacting them. A recent study[1] by Dr. Joyce Serido and other researchers focused on how emerging adults retrospectively viewed how they were parented and how it affects their financial habits and personal wellbeing in their first year of college.

The phrase “we’re all family here” has become a modern-day workplace staple. Appealing to the need for human belonging, businesses with the best of intentions attempt to create a supportive, collaborative company culture. But the blurring of lines between personal and professional often comes at the expense of one to the other. Tasked with meeting the demands of two “families,” employees inevitably crack under pressure and may underperform in the home and/or workplace. Companies may see better results as they invest in their employees’ actual families, and here’s why:

In a world with information readily available at our fingertips, we often forget about the power of teaching within the home. For example, although children could Google any financial question, what and how they learn about money from their parents (called financial socialization) is the top predictor of their future financial wellbeing.1 The financial literacy gained through these processes will inevitably benefit children later in life as it is applied in emerging adulthood.2,3 Why do children learn more about money from parents than from peers, media, work, or other sources? The home is where children spend most of their time, and the groundwork laid there can have long lasting effects on children’s attitudes and behaviors. There are three primary ways that parents teach children about money: modeling, discussion, and experiential learning.4

How well do today’s emerging adults do when it comes to managing money? For the most part, not as well as we would hope. But that can change. A multi-generational, interview-based project was conducted to better understand what and how parents are teaching their children about finances. Based on the What’s and How’s of Family Financial $ocialization project, researchers have drawn numerous conclusions to assist parents in addressing and shrinking the gap between financially literate and financially illiterate emerging adults.[1]

When you are asked to donate at the cash register, do you do it? Your answer is likely the same as your parents’ answer to this question because children learn financial habits, like whether to donate or not, from their parents and often emulate what they’ve seen their parents do.

Having a child can bring a wave of emotions. As many parents can attest, some of these emotions might not be “positive” ones, however. Although estimates vary, around 1 in 5 fathers[i] and mothers[ii] in the United States may experience postpartum depression. In addition to the mental effect of women’s post-birth hormonal rollercoaster, mental health challenges might also result from seeking to balance work with new family responsibilities—all with a potentially varying sleep schedule.

Any parent can attest to the challenges of teaching their children good principles and practices. Indeed, children do not always listen to, remember, or follow the guidance that parents give—no matter how beneficial that guidance may be. Parents may wonder whether or not their efforts are worthwhile.

Parenting often isn’t glamorous. Changing seven diapers in a day, cleaning up vomit at 3 am, and trying to keep the peace between teenage siblings are just a few of the many challenges parents often face. In addition to parenting challenges, the external stressors of jobs, traveling for work, moving residences for a new job, paying bills on time, making ends meet, and saving money for the future leave many families feeling stressed and exhausted.

With over a decade of advances in the field of financial socialization, it can be difficult to find exactly what you’re looking for advice on. What have financial researchers learned about how money impacts families and how to teach children about finances? This article summarizes a decade of family financial socialization research,[1] which is the study of how families teach their children about finances and the consequences those teachings have on children’s later financial outcomes. Please feel free to use this article as a segue to various sources of academic information on financial socialization.