Family Financial Socialization and Financial Autonomy of Children in Malaysia

• Main Author: Loke, Yiing Jia
• Format: text
• Published: Animo Repository 2022
• Subjects: Family Financial Socialization; Financial Autonomy; Experiential Learning; Pocket Money; Gift Money; Financial Role-Modeling.
• Online Access: https://animorepository.dlsu.edu.ph/apssr/vol22/iss3/4; https://animorepository.dlsu.edu.ph/context/apssr/article/1462/viewcontent/RA_203.pdf
• Institution: De La Salle University

The existing studies on family financial socialization have primarily focused on the significance of family financial socialization on young adults’ financial well-being and financial behavior. The practice of giving pocket money is one of the financial socialization activities carried out by parents. There has been modest research on such practices. However, these studies have mainly focused on the predictors of pocket money giving, the conditions of receiving pocket money, and the effects of such a receipt on young adults’ financial behavior. Limited studies have examined the relationship between family dynamics and the financial autonomy parents give their children concerning pocket money. In Malaysian society, apart from pocket money, gift money is an additional source of money that children receive from their parents, and it is not accounted for in existing studies. The financial autonomy that parents give children in managing pocket money and gift money is a form of experiential learning. The parents’ approach indicates the level of trust and confidence they have in their children. Trust and confidence could stem from past familial financial socialization activities. This study explored the association of the family financial socialization activities and other socio-economic factors on the extent of financial autonomy parents grant their children concerning pocket money and gift money. A total of 504 parents from Penang participated in a structured survey questionnaire. The data collected were analyzed using the chi-square test and multinomial logit analysis that revealed the main characteristics of parents in shaping financial autonomy among children in Malaysia across all ethnicity. The results further showed that family financial socialization activities such as financial discussion, financial role-modeling, and interactions between parent and child play a crucial role in facilitating experiential learning and enhancing children’s financial literacy.