Parent Financial Socialization Scale: Development and preliminary validation.

Abstract

A theoretically grounded, validated measure of parent financial socialization is needed. This article describes the development and validation process of three new scales: the Parent Financial Modeling Scale (eight items), the Parent-Child Financial Discussion Scale (nine items), and the Experiential Learning of Finances Scale (three items). These may be treated as subscales of a multidimensional latent construct: the Parent Financial Socialization Scale (20 items). The three scales measure the three primary methods of family financial socialization. The scales are designed to be retrospective, with target participants being U.S. emerging adults (age 18-30). A rigorous development process was undertaken: an initial pool of items was generated, expert assessments were collected, cognitive interviews were conducted, and (following preliminary data collection) preliminary item reduction analysis and confirmatory factor analysis (CFA) were conducted. Final data were collected from a diverse (51.7% female, 47.6% male; 31.6% White, 22.0% Black, 19.8% Latinx, 14.6% Asian; 50.4% no parent with college degree, 47.4% parent with college degree) sample of 4,182 U.S. emerging adults. During validation, item reduction analysis, CFA, reliability tests, measurement invariance tests, and construct validity tests were conducted. The scales demonstrated acceptable reliability and validity, and invariance was established across sex, race, and parents' education level. These scales are unique in their ability to capture nuance and will allow for comparisons across studies. They will enhance the quality of family financial socialization research, expand the questions that can be answered, and allow for the development of programming that is effective for a wide range of families.

Less Than Fully Honest: Financial Deception in Emerging Adult Romantic Relationships

“…Financial socialization, our second exogenous variable, was measured using the Parent Financial Socialization Scale (LeBaron-Black et al, 2021b). The 20-item scale is comprised of three subscales including: Parent Financial Modeling (e.g., "While I was growing up, my parents were good examples of how to manage money"; Rosa-Holyoak et al, 2018), Parent-Child Financial Discussion (e.g., "While I was growing up, my parents were open with me about their budget [or, if they did not have a budget, were open with me about that]"; LeBaron et al, 2020b), and Experiential Learning of Finances (e.g., "My parents gave me hands-on experiences with money while I was growing up"; LeBaron et al, 2019b).…”

“…Additionally, 364 (18.7%) identified as Black or African American, 236 (12.1%) identified as Asian, 402 (20.6%) identified as Hispanic or Latinx, 725 (37.2%) identified as White, 34 (1.7%) identified as American Indian or Alaska Native, 16 (.8%) identified as other, 158 (8.1%) selected more than one category, and 15 (.8%) preferred not to answer. For more information on this sample and data collection, see LeBaron-Black et al (2021b).…”

Finances and Fate: Parent Financial Socialization, Locus of Control, and Mental Health in Emerging Adulthood

“…Participants responded on a Likert type scale ranging from 1 (Strongly Disagree) to 7 (Strongly Agree), with higher scores indicating higher quantity and quality of socialization. We had originally planned to utilize the three subscales as distinct independent variables, but because the subscales were highly correlated with each other, we instead used them together as a second-order latent construct (which is an appropriate use of the scale; LeBaron-Black et al, 2021) to avoid issues with multicollinearity. For additional information regarding scale development and validation of the scales, refer to LeBaron-Black et al (2021).…”

“…We analyze data from the Measuring Family Financial Socialization project (LeBaron-Black et al, 2021; funded by a grant from the National Endowment for Financial Education). For this project, 4182 participants were recruited by Qualtrics Panel.…”

“…About 46.1% came from a family where the household income was below $50,000 (i.e., a low-income status; Bennett et al, 2020), 45.6% came from a family where the household income was between $50,000 and $100,000 (i.e., a middle-income status; Bennett et al, 2020), and 8.3% came from a family where the household income was $150,000 or higher (i.e., a high-income status; Bennett et al, 2020). For more information on this sample and data collection procedures, see LeBaron-Black et al (2021).…”