Financial Socialization as a Determinant of Healthier Financial Behavior

Abstract

Understanding how millennials manage their money is crucial in today's dynamic economic landscape. While this generation, often characterized by their independent spirit and comfort with technology, faces unique financial challenges, their approach to money management isn't formed in a vacuum. This research explores the vital role of financial socialization – the process through which individuals learn about money – in shaping the financial behaviors of Indian millennials. Rather than focusing on broad generalizations about millennial traits, this study delves into the specific agents and experiences that influence their financial decision - making. We investigate the impact of family, particularly parents, on the financial perspectives and practices of millennials aged 24 - 44 in West Bengal, India. We recognize that while millennials value individuality, they are also deeply connected to their families and cultural context. This study seeks to understand how these familial connections shape their financial journey. We surveyed 217 millennials in West Bengal, using an online questionnaire to gather data about their financial socialization experiences and current money management practices. Our analysis reveals the enduring influence of parents, particularly mothers and fathers, as key figures in shaping millennials' financial behaviors. We explore the specific ways in which parents contribute to their children's financial understanding, examining the frequency and nature of family financial discussions. Our findings suggest that even in a rapidly changing world, parental guidance and familial financial interactions play a significant role in fostering sound financial habits among millennials. This research highlights the importance of intergenerational financial knowledge transfer and offers valuable insights into the dynamics of millennial financial behavior within the Indian context.