Parental financial socialization and life satisfaction of college students: mediation and moderation analyses

Abstract

Purpose This study aims to examine the association between parental financial socialization and life satisfaction and the mediating roles of desirable financial behavior in the association between parental financial socialization and life satisfaction of college students in India. Furthermore, this research also explores the moderating effects of parents’ socioeconomic characteristics (education, income and professions) in the association between parental financial socialization and desirable financial behavior. Design/methodology/approach A sample of 1,161 college students was collected in India. Parental financial socialization is measured by direct parental teaching in this study. The first stage moderated mediation model is performed to examine the direct and indirect effects through financial behavior of parental financial on life satisfaction as well as the moderating role of parents’ socioeconomic characteristics. Findings The mediation analysis shows that parental direct teaching is positively associated with young adults’ financial behavior, which in turn contributes to their life satisfaction. Furthermore, this study also finds negative moderation effects of parental education on the association between parental direct teaching and children's financial behavior. Originality/value This study extends the knowledge of family financial socialization in the context of India. Moreover, it examines the mediation roles of desirable financial behavior in the association between parental direct teaching and children’s life satisfaction. Furthermore, this paper explores the potential influence of parents’ education, income and professions on children’s financial behavior and life satisfaction.