Parental financial socialization, financial behaviors, and well‐being among Hong Kong young adults amid COVID‐19

• Published date: 01 December 2023
• Author: Muhammad Aamir Khan,Xiaomin Li,Ashley B. LeBaron‐Black,Joyce Serido
• Date: 01 December 2023
• DOI: http://doi.org/10.1111/fare.12947

RESEARCH

Parental financial socialization, financial behaviors,

and well-being among Hong Kong young adults amid

COVID-19

Muhammad Aamir Khan

1

|Xiaomin Li

1

|

Ashley B. LeBaron-Black

2

|Joyce Serido

3

1

Department of Applied Social Sciences,

The Hong Kong Polytechnic University,

Hong Kong

2

School of Family Life, Brigham Young

University, Provo, UT

3

College of Education and Human

Development, University of Minnesota–Twin

Cities, Minneapolis, MN

Correspondence

Xiaomin Li, GH344, Department of Applied

Social Sciences, The Hong Kong Polytechnic

University, 11 Yuk Choi Road, Hong Hum,

Hong Kong.

Email: xiaomin.li@polyu.edu.hk

Funding information

This research project is funded by Start-up for

New Recruits at The Hong Kong Polytechnic

University (principal investigator: Dr. Xiaomin

Li) and the Public Policy Research Funding

Scheme of The Government of the Hong Kong

Special Administrative Region (Project

Number: 2023.A6.221.23A; principal

investigator: Dr. Xiaomin Li).

Abstract

Objective: We investigated how parental financial sociali-

zation was related to Hong Kong young adults’financial

behaviors and well-being amid COVID-19.

Background: We extended existing literature by including

two types of financialbehaviors: healthy money manage-

ment (e.g., spending within budget) and financial enabling

(i.e., overgiving and sharing financial resources). We

focusedonwell-beinginfinancialandnonfinancialdomains

(i.e., financial well-being and hopelessness, respectively). We

also considered moderating roles of gender, family socioeco-

nomic status (SES), and income changes during COVID-19.

Methods: We collected cross-sectional survey data from

604 Hong Kong young adults and conducted structural

equation modeling.

Results: Parental financial socialization, on the one hand,

promoted well-being via healthier money management.

On the other hand, parental financial socialization

increased financial enabling and reduced well-being. The

examined associations varied across gender, family SES,

and income changes during COVID-19.

Conclusions: Parental financial socialization was a “double-

edged”sword, and the examined associations varied for

young adults with diverse experiences across gender, family

SES, and income changes during COVID-19.

Implications: Efforts are needed to strengthen desired con-

sequences and alleviate undesired ones of parental finan-

cial socialization. The different needs and experiences of

young adults deserve attention.

Author note: Dr. Khan and Dr. Li contributed equally to the preparation of this manuscript.

Received: 31 January 2023Revised: 6 July 2023Accepted: 12 August 2023

DOI: 10.1111/fare.12947

© 2023 National Council on Family Relations.

Family Relations. 2023;72:2279–2296. wileyonlinelibrary.com/journal/fare 2279

KEYWORDS

financial behaviors, Hong Kong young adults, parental financial

socialization, well-being

Young adults (aged 18–30 years)areinthedevelopmentalstageofseekingindependence

(Arnett et al., 2014). Financial behaviors (i.e., actions related to handling money) and financial

well-being (i.e., a satisfactory financial situation) are the crucial foundation for achieving self-

reliance (Li et al., 2022; Li et al., 2019). According to the family financial socialization theory

(Gudmunson & Danes, 2011), the family has been documented as the first and one of the most

central settings of financial socialization—the process in which individuals learn about money

management—and parental financial socialization is especially important (for reviews, see

Gudmunson & Danes, 2011; LeBaron & Kelley, 2021).

Parental financial socialization includes (a) discussion—verbal communication,

(b) modeling—setting behavioral examples, and (c) experiential learning—using life experiences

to help offspring internalize rules, norms, and knowledge (LeBaron et al., 2018; LeBaron-Black,

Curran, et al., 2022; LeBaron-Black, Li, et al., 2022). Parental financial socialization helped

individuals develop financial behaviors during childhood and adolescence, which—while con-

trolling for possible predictors such as employment, personal income, personal education, stable

personalities, and family income—can cause a long-lasting and substantial impact on individ-

uals’well-being (Dew & Xiao, 2011; Goyal & Kumar, 2021; Gudmunson & Danes, 2011;Li

et al., 2020; Li et al., 2022; Sorgente & Lanz, 2017).

Taking together theory and empirical studies, a mediational process is proposed that parental

financial socialization is associated with young adults’well-being via financial behaviors

(i.e., parental financial socialization àfinancial behaviors àwell-being; Gudmunson &

Danes, 2011; LeBaron-Black, Li, et al., 2022; Li et al., 2020;Lietal.,2022;Lietal.,2019). Because

the economic world is getting increasingly complicated by social changes such as the COVID-19

pandemic (Kelley et al., 2023; Sun et al., 2021), drawing from family financial socialization theory

and empirical studies to test the mediational process is important for preparing the younger genera-

tion for a better future. In doing so, gaps in the existing literature should be acknowledged.

First, for the associations between parental financial socialization and financial behaviors,

theory and empirical studies have focused on healthy money management (i.e., money manage-

ment behaviors such as spending within budget and regularly saving; Dew & Xiao, 2011) and

consistently demonstrated the positive consequences of parental financial socialization

(i.e., higher-quality parental financial socialization was associated with healthier financial

behaviors; Gudmunson & Danes, 2011; LeBaron & Kelley, 2021). However, parents intention-

ally or unintentionally teach not only spending, saving, and budgeting but also on sharing and

giving (LeBaron, 2019; LeBaron-Black, Curran, et al., 2022), and this process usually conveys

information that is only partially true (Klontz et al., 2015). Thus, we extend the scope of finan-

cial behaviors by including the still understudied concept of financial enabling—less healthy

financial behaviors of giving too much money to others that cost the financial well-being of

individuals themselves (Britt, 2016; Klontz et al., 2012). Our study, therefore, explores not only

the positive effects but also the possible side effects of parental financial socialization.

Second, for the associations between financial behaviors and well-being, the original con-

ceptualization of family financial socialization theory (Gudmunson & Danes, 2011) focused on

individuals’financial outcomes, including financial well-being (i.e., the overall wellness of one’s

financial situation; Sorgente & Lanz, 2017). However, a growing number of studies have docu-

mented the importance of financial behaviors in the associations with young adults’non-

financial outcomes (e.g., mental health and overall life satisfaction; LeBaron-Black, Curran,

et al., 2022; LeBaron-Black et al., 2023; Li et al., 2020; Li et al., 2022; Li et al., 2019). In this

study, we further extend the scope of nonfinancial outcomes by focusing on young adults’

2280 FAMILY RELATIONS