Effect of parental financial teaching on college students’ financial attitude and behavior: The mediating role of self-esteem

Abstract

This study investigated the effect of parental financial teaching on college students’ financial attitude and behavior and the mediating roles of college students’ self-esteem and financial knowledge within these relationships. An online survey including questions on demographics, parental financial teaching, self-esteem, financial knowledge, attitude, and behavior was given to a sample of 193 undergraduate and graduate students at a Midwestern university in the U.S. A model consisting of nine hypotheses reflecting these relationships was established and tested by structural equation modeling. The results revealed that parental financial teaching positively affected financial behavior both directly and indirectly through self-esteem and financial attitude. Most importantly, self-esteem played a mediating role in connecting parental financial teaching to students’ financial attitude and behavior, whereas financial knowledge did not play any role. Consequently, this study found that parents’ financial teaching positively influences their children’s financial attitude and behavior by increasing their self-esteem.