Are You Close with Your Parents? The Mediation Effects of Parent–Child Closeness on Young Adults’ Financial Socialization Through Young Adults’ Self-reported Responsibility

Abstract

This study investigated the relationship between young adults’ closeness with their parents, their self-reported money management behaviors, and worry about money as mediated through young adults’ self-reported responsibility. The sample of 1632 young adults aged from 18 to 27, was obtained from the Panel Study of Income Dynamics—Transition into Adulthood Supplement (2015), and was 48.0% male and 49.8% white. A path analysis tested the conceptual model based on the family financial socialization theory (FFST) (Gudmunson and Danes, Journal of Family and Economic Issues 32:644–667, 2011). The results demonstrate that closeness with both fathers and mothers was positively associated with financial behaviors mediated through young adults’ self-reported responsibility after controlling for age, parents’ education and financial assistance from the family. However, only closeness with father had a direct association with positive self-reported money management behaviors and an indirect association with worry about money. Young adults’ self-reported responsibility, in terms of their financial capabilities, resulted in an indirect effect on worry about money through self-reported money management behaviors. We discuss the meaning of the effects of closeness with parents as a domain-general factor on financial outcomes.