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Parental transfer of financial knowledge and later credit outcomes among low- and moderate-income homeowners

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  • Grinstein-Weiss, Michal
  • Spader, Jonathan
  • Yeo, Yeong Hun
  • Taylor, Andréa
  • Books Freeze, Elizabeth

Abstract

It is well established that acquiring financial skills during childhood is linked with better savings in adulthood. Little is known, however, about the relationship between parental teaching of money management early in life and children's financial outcomes in adulthood. This is particularly true for low- and moderate-income (LMI) households. Using data from Community Advantage Program survey data for 2,389 LMI homeowners, we find that adults who report receiving high levels of money-management teaching in childhood from their parents are associated with higher credit scores and lower credit card debt in adulthood. We also find that the level of parental financial teaching influences the relationship between children's later educational attainment and credit scores. These findings suggest implications for initiatives promoting financial capability for parents and children.

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  • Grinstein-Weiss, Michal & Spader, Jonathan & Yeo, Yeong Hun & Taylor, Andréa & Books Freeze, Elizabeth, 2011. "Parental transfer of financial knowledge and later credit outcomes among low- and moderate-income homeowners," Children and Youth Services Review, Elsevier, vol. 33(1), pages 78-85, January.
    • Handle: RePEc:eee:cysrev:v:33:y:2011:i:1:p:78-85
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    13. Ashley B. LeBaron & E. Jeffrey Hill & Christina M. Rosa & Travis J. Spencer & Loren D. Marks & Joshua T. Powell, 2018. "I Wish: Multigenerational Regrets and Reflections on Teaching Children About Money," Journal of Family and Economic Issues, Springer, vol. 39(2), pages 220-232, June.
    14. Sigrid Luhr, 2018. "How Social Class Shapes Adolescent Financial Socialization: Understanding Differences in the Transition to Adulthood," Journal of Family and Economic Issues, Springer, vol. 39(3), pages 457-473, September.
    15. Terri Friedline & Mary Rauktis, 2014. "Young People Are the Front Lines of Financial Inclusion: A Review of 45 Years of Research," Journal of Consumer Affairs, Wiley Blackwell, vol. 48(3), pages 535-602, October.
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    17. Brown, Sarah & Taylor, Karl, 2016. "Early influences on saving behaviour: Analysis of British panel data," Journal of Banking & Finance, Elsevier, vol. 62(C), pages 1-14.
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    19. Jennifer K. Rea & Sharon M. Danes & Joyce Serido & Lynne M. Borden & Soyeon Shim, 2019. "“Being Able to Support Yourself”: Young Adults’ Meaning of Financial Well-Being Through Family Financial Socialization," Journal of Family and Economic Issues, Springer, vol. 40(2), pages 250-268, June.
    20. Moreno-Herrero, Dolores & Salas-Velasco, Manuel & Sánchez-Campillo, José, 2018. "Factors that influence the level of financial literacy among young people: The role of parental engagement and students' experiences with money matters," Children and Youth Services Review, Elsevier, vol. 95(C), pages 334-351.
    21. Terri Friedline & Stacia West, 2016. "Financial Education is not Enough: Millennials May Need Financial Capability to Demonstrate Healthier Financial Behaviors," Journal of Family and Economic Issues, Springer, vol. 37(4), pages 649-671, December.
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