Examining the Effects of Personal and Sociodemographic Factors on Family Financial Socialization Process

The Family Financial Socialization Model (FFSM; Gudmunson & Danes, 2011) describes the process through which family practices (parental financial modeling, positive and negative financial communication with parents) affect child’s intermediary outcomes (financial attitude, knowledge, capability) and socialization outcomes (financial behavior, well-being). Although personal and sociodemographic characteristics (gender, ethnicity, family socioeconomic status (SES)) are presumed to influence financial socialization outcomes via family, we hypothesize that these characteristics will also influence the child’s financial outcomes (Serido et al., 2020). To test our hypothesis, we rely on three waves of data (2008, 2010, 2013) drawn from a longitudinal study (Arizona Pathways to Life Success (APLUS); Shim et al., 2010). The sample is composed of 2,091 emerging adults (62% female) aged 17-25 years (M=19.37; DS=0.64) in 2008. All analyses were conducted using Mplus version 8.8 with Maximum Likelihood Robust (MLR) estimation. Our results provide support for our hypothesis. Specifically, being female is associated with higher levels of positive financial communication and parental modeling and lower levels of negative financial communication. Being female was also associated with higher financial attitude, but lower objective and subjective financial knowledge. Regarding ethnicity, it only affects objective financial knowledge, which is higher for white emerging adults than others. Finally, regarding family SES, coming from a wealthier family increases the level of positive parent-child financial communication and parental financial modeling as well as higher financial well-being. All effects were invariant over time, except the effect of family SES on parental financial modeling that was stronger at time 1 (.166) than time 2 and 3 (.081).