Family financial conversations: Using social cognitive theory to understand the intergenerational transmission of financial literacy

Objective This study aimed to examine how participants experience intergenerational family communication about finances. Background Despite the increasingly hostile financial landscape, emerging adults report that they do not have the knowledge to manage their finances. As such, young adults find themselves taking on more debt. We turned to social cognitive theory to understand how participants reported their parents taught them about finances and how they discuss finances with their own children. Method We interviewed 26 participants who were recruited using a convenience sample. Using thematic co‐occurrence analysis, we compared how participants perceived family financial communication changed across generations. Results Participants reported that their parents taught them about finances by (a) not discussing finances, (b) observation, (c) necessity conversations, (d) open communication, and (e) through managing finances. Parents shared messages of (a) responsibility and (b) privacy. In contrast, participants explained that they taught their own children about finances using (a) ongoing conversations and (b) experiential learning and shared messages about (a) responsibility, (b) credit and debt, and (c) sophisticated financial messages. Conclusion and Implications This study demonstrates how modeled behavior can change across generations. Additionally, these findings are a call for schools to provide financial education to students.