Financial Parenting: Promoting Financial Self-Reliance of Young Consumers

This chapter reviews the financial parenting practices that foster the development of children’s financial knowledge and skills, preparing them to become financially self-reliant adults. Financial self-reliance encompasses financial independence and financial capability as well as the ability to make prudent financial decisions based on available options and resources. In many countries, financial self-reliance is a key marker of adult status. Parents play an important role in shaping the financial knowledge and skills their children need to achieve this milestone. Financial parenting refers to three contexts through which parents influence children’s progress toward financial self-reliance: socialization, parenting style, and parental social class. This chapter has two objectives: (1) to describe the ways that financial parenting promotes the acquisition of financial knowledge and skills and (2) to propose how financial parenting promotes or constrains financial self-reliance. We conclude with recommendations for those who work with or on behalf of young consumers.