October 07, 2022
By University of Arizona and Brigham Young University
This project, funded by the National Endowment for Financial Education and conducted by researchers from the University of Arizona and Brigham Young University, sought to develop three new theoretically-driven and psychometrically-tested scales to measure family financial socialization. Family financial socialization assesses how children learn financial lessons from their parents or other family figures and how those processes impact outcomes later in life. Until now, existing measures for family financial socialization have been limited and unable to capture a complete picture of socialization across various population segments.
The researchers developed three scales of family financial socialization. The first is parent financial modeling, which is the process of learning through child observation of parental financial behaviors. The second is parent-child financial discussion, which is learning about finances through verbal communication between parents and children. The final method is experiential learning of finances, which is the process of acquiring financial knowledge through life experiences.
Cognitive interviews with emerging U.S. adults and expert assessments helped inform revisions of the initial scale items, which the researchers fielded to an initial sample of 402 respondents. A final sample of 4,182 emerging adults responded to the revised version, and the data was used to conduct a variety of statistical testing to ensure validity and reliability. The final data set includes an oversampling of Black/African American, Hispanic/Latino/Latina/Latinx, and Asian respondents to account for historical underrepresentation in similar studies. Additionally, participants had a variety of parental educational backgrounds and life experiences, such as pursuing higher education or becoming parents themselves.
These scales will have a profound impact on the research community as the first of their kind to be theoretically grounded and psychometrically validated. With consistent use, they will help researchers find new methods to improve financial education interventions. As refinement and publication continues, the National Endowment for Financial Education hopes that scholars and research organizations will use these scales in place of previous survey items to ensure consistent measuring and reflection of the most recent theoretical understanding of family financial socialization.
This NEFE-funded research resulted in the following published journal articles:
LeBaron-Black, A. B., Curran, M. A., Hill, E. J., Freeh, M. E., Toomey, R. B., & Speirs, K. E. (2022). Parent Financial Socialization Scale: Development and preliminary validation. Journal of Family Psychology, 36(6), 943–953. https://doi.org/10.1037/fam0000927
LeBaron-Black, A. B., Curran, M. A., Hill, E. J., Toomey, R. B., Speirs, K. E., & Freeh, M. E. (2022). Talk is cheap: Parent financial socialization and emerging adult financial well-being. Family Relations, 1– 19. https://doi.org/10.1111/fare.12751