Young Adults’ Financial Literacy and Family

Characteristics

How did you learn about money and finances?

Why is financial literacyimportant for young adults?

• Acquire high levels of debt

• Culture of individual responsibility

• Causes adverse decisions

Why focus on family?• Primary unit for learning about finances

• 94% students, parents are most sought source

• 50% who monitor finances learned from

parents

• Parents influence begins at child’s birth

Characteristics of familyParents’ education & experience

Teaching methods & timing

Gender differences

Anxiety & family situation

Parents’ education & experience

High correlation with family income

Strong predictor of child’s financial literacy

• Higher education correlates to higher

dependence

• Adults posses more financial knowledge

than teens

Teaching methods

• Learning begins before children develop

• Non-formal education sets foundation

• Financial literacy increases using teachable

events

• High school teaching fails to fully develop

Teaching methodsChildren’s financial knowledge will

INCREASE

• Given opportunity to spend money

• Have money to use

• Have money to save

• Parents are responsible with money

Teaching methodsMisconceptions that alone will

NOT INCREASE children’s financial knowledge

• Given an allowance

• Given opportunities to make more

money

Gender differences

• Family shapes experiences on how gender relates to

money

• Fathers teach more; Mothers better prepare children

• Women less financially knowledgeable than males

• Females focus on overall finance

• Males focus on earning, increasing value in money

• Females experience more financial difficulties

• Financial information acquired within family is

aligned with gender roles

Anxiety and situation

• Financial strains influence family relationships

• Economic strains increase parent-adolescent

conflict

• Family income influences parent-adolescent

relationship

• Needs call for reduced resources

Summary• Financial literacy is important for young adults

• Family is the primary unit for learning about

finances Parents education strong predictor of child’s financial

literacy

Teaching must begin early; learning begins early

Education should incorporate teachable events

Family shapes experiences on how gender relates to

money

Financial strains can influence family relationships

REMEMBER THIS!

Financial literacy is important for young adults and family has the greatest influence on young adults’

financial knowledge.

ANY QUESTIONS?