Financial Socialization, Childhood Experiences and Financial Well-Being: The Mediating Role of Locus of Control

Abstract

The present study evaluates an empirical model of financial well-being (FWB) based on early childhood consumer experiences (ECCE) and financial socialization (FS). FWB is the overall satisfaction with one’s current financial situation, and that plays a vital role in the overall success and helps to overcome psychological health issues among adults. The results of the study suggested that ECCE has a significant direct effect on the FWB among adults. Moreover, FS agents such as peers harm the financial well-being of the adults. The results also revealed that financial locus of control (LOC) mediates the relationship between FS agents such as parents, teachers, and FWB. Surprisingly, FS agent peers and ECCE do not affect the FWB of adults when LOC works as a mediator. Possibly, when adults socialize more with parents and teachers, they often disregard the role of peers. Adults’ belief and confidence in their skills are vital in explaining the above relationships. Educationists and practitioners should focus on improving discussions with parents and teachers about the financial matters that result in improvements in financial well-being. The present study also provides theoretical and practical implications for adults, parents, and policymakers.

Psychological beliefs and financial well-being among working adults: the mediating role of financial behaviour

“…While the locus of control is considered a central component of well-being (Spector et al, 2002), there are a limited number of studies which have explored the relationship between locus of control and financial well-being (Cobb-Clark et al, 2016;Mokhtar and Husniyah, 2017). In the context of personal finance, research indicates that the locus of control relates to financial satisfaction and savings, where people with a higher level of control are more satisfied with their financial status (Ullah and Yusheng, 2020) and are in more control over their savings.…”

“…This would imply that the different types of locus of control should be investigated separately (Brewin and Shapiro, 1984). Furthermore, past research has suggested that when examining personal financial behaviour and financial well-being, internal locus of control is more relevant (Jorgensen et al, 2017;Ullah and Yusheng, 2020). Therefore, this study focused on the internal locus of control, as it is arguably more appropriate to investigate a personal, psychosocial perspective.…”

Financial literacy and financial behavior with the mediating effect of family financial socialization in the financial institutions of Lahore, Pakistan

“…According to Ullah and Yusheng [44], financial socialization includes the development of standards, values, norms, and attitudes, rather than just related to managing money. As described by Asad et al [4] financial socialization has much importance in making sound financial decisions.…”

Pathways to Financial Success: An Empirical Examination of Perceived Financial Well-Being Based on Financial Coping Behaviors

“…To do so, we propose a model of FS and ECCE on FCB and their connection with FWB. Although developmental studies examined these factors (Sabri, 2011 ; Drever et al, 2015 ; Netemeyer et al, 2018 ; Rea et al, 2019 ; Lanz et al, 2020 ; Mubeen et al, 2020 ; Sabri et al, 2020 ; Ullah and Yusheng, 2020 ), they applied other combination of variables to study FWB.…”