Childhood Financial Socialization and Debt Related Financial Wellbeing Indicators in Adulthood

Written By: David Allen Ammerman and Cherie Stueve

The purpose of this study was to explore the potential influence of childhood financial socialization on financial wellbeing in adulthood. Using a sample (N = 2,213) from De Nederlandsche Bank Household Survey (DHS) we modeled the likelihood of household debt/asset ratio less than or equal to 40%, and the likelihood of a household reporting a current ratio (liquid asset /short term debt ratio) greater than or equal to 100%. Consistent with predictions of social learning theory, being encouraged to save during childhood had a positive association with meeting the financial planning industry benchmarks for these financial ratios in adulthood. The key implication is that the path to financial wellbeing does not begin with financial knowledge attained in adulthood, but instead begins with experiential learning and socialization during childhood.