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Family Financial Socialization: Theory and Critical Review

Abstract

Financial literacy research of the past 40 years (1970–2010) has largely ignored the reasons for sociodemographic differences in financial outcomes. The primary purpose of this paper is to initiate a theoretical discussion regarding family financial socialization—what it is; why it is important; and how its tenets could help advance understanding of individual differences in financial literacy. To this end, we propose a conceptual model that integrates family socialization theory and recent trends in financial literacy research. The study concludes with an interdisciplinary critical review of 100 articles which provide illustrations, highlight gaps, and present opportunities for further research with many practical guidelines for advancing deeper understanding of financial literacy from a socialization perspective.

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Fig. 1

Notes

  1. 1.

    Across generations, economic and financial variables have an impact on certain demographic variables such as marital status, the age at which major life events take place, and a person’s socioeconomic status, but these types of life course studies are beyond the scope of this review.

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Acknowledgments

We would like to thank three anonymous reviewers whose constructive advice helped us improve the quality of manuscript.

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Correspondence to Clinton G. Gudmunson.

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Gudmunson, C.G., Danes, S.M. Family Financial Socialization: Theory and Critical Review. J Fam Econ Iss 32, 644–667 (2011). https://doi.org/10.1007/s10834-011-9275-y

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Keywords

  • Family relationships
  • Financial literacy
  • Financial socialization
  • Financial attitudes
  • Socialization theory