Family financial socialization, financial information seeking behavior and financial literacy among youth

Abstract

Purpose This study examined the relationship between financial information seeking behavior and financial literacy, as well as the relationship between parents' teaching and behavior with financial information seeking behavior through the factors of the risk information seeking and processing model among youth. Design/methodology/approach A sample of 802 tertiary education students participated in this cross-sectional study. Using covariance-based structural equation modeling, the model was assessed and hypotheses were tested. Findings The results revealed that financial information seeking behavior contributed to youth's financial literacy. While parents' sound financial behavior was directly related to seeking financial information, both parents' financial teaching and behavior indirectly, through the risk information seeking process, encouraged youth to actively seek for financial information. Moreover, parents' financial socialization directly and also indirectly through the risk information seeking and processing model explained youth's financial information avoidance. Among the two parts of the risk information seeking and processing model, planned behavior factors played a more salient role than cognitive need for financial information. Originality/value This study extends the risk information seeking and processing model by integrating family financial socialization to the model and applies it in the context of consumers' financial behavior. The results improve our understanding of the social and psychological mechanism that drives consumers' financial literacy and decision-making.