The Difference in Parental Financial Socialisation Across Parental Education Level

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INTRODUCTION
Due to potential effects on parental financial socialization, parental education level has recently gained prominence on a global scale.The degree of education of parents affects how they raise their children (Salim & Pamungkas, 2022).Research has also indicated that young adults' financial literacy and personal financial management are significantly impacted by their parents' educational attainment (Durmuşoğlu & Yıldız Taşdemir, 2022;Homan, 2015;Ismail et al., 2022;Radianto et al., 2019).Thus, it has been repeatedly shown that parental education level has a significant impact on the lives of parents and young adults.Still, it remained to be shown and conclusively demonstrated if parental education level influences parental financial socialization.The claim is that parental financial socialization appears to vary depending on the educational attainment of the parents.Due to differences in their educational backgrounds, parents may take distinct approaches to financial socialization.Higher-educated parents are inclined to engage in financial socialization more frequently (Serido et al., 2020).Young adults' general financial well-being and money management are greatly impacted by the absence of parental financial socialization.Therefore, it is critical that young individuals receive relevant and adequate parental financial socialization, regardless of the educational attainment of their parents.Young adults must therefore be ready financially for their journey into adulthood.Sound financial practices and asset management are strongly correlated with early financial socialization from parents.In order to ensure that parental financial socialization occurs, it is necessary to identify and understand any obstacles that may prevent parents from engaging in this important financial education.This is because financial socialization plays a significant role in how young adults handle money.Research on how parental financial socialization varies according to parental education level is extremely rare, particularly in developing nations like South Africa.The few noteworthy research (Gudmunson & Danes, 2011;Jorgensen and Salva, 2010;Kim & Chatterjee, 2013;Serido et al., 2010;Serido et al., 2020) were mostly carried out in wealthy nations.The differences in parental financial socialization across parental education levels in South Africa have not been the subject of any research.In order to close the noted research gap and add to the body of literature, the current study will look into this matter.In order for the government to develop initiatives to close the disparities in parental financial socialization, it is critical that the differences in financial socialization across parental educational levels in South Africa be examined.Parental financial behavior, financial monitoring, financial discussions, financial communication, and financial education are all used to study parental financial socialization.This study sought to ascertain how parental financial socialization differed depending on parental education levels.The purpose of this is to learn more about the financial socialization of parents.The following hypotheses were put forth: • H1: The financial behavior of parents varies significantly depending on their educational attainment.
• H2: The amount of financial monitoring provided by parents varies significantly depending on their educational attainment.
• H3: Parental financial discussions change significantly depending on the educational attainment of the parents.
• H4: Parental financial communication varies significantly depending on the educational attainment of the parent.
• H5: Parental financial teaching varies significantly depending on the educational attainment of the parent.This is how the rest of the article is organized: Section 2 offers an overview of the literature.The research and study methodology are examined in Section 3. The findings and discussions are covered in Section 4. Conclusions and recommendations are given in Section 5. Danes (1994) developed the concept of financial socialization based on Ward's (1974) definition of consumer socialization.Though they are distinct concepts, financial socialization and consumer socialization are occasionally used synonymously in research on how children acquire financial literacy.According to Danes (1994), financial socialization is the process by which individuals learn and acquire financial beliefs, information, and behaviors that influence their financial behavior and money management.Danes (1994) offers a thorough description of financial socialization that encompasses the ideas of financial viability and well-being.Therefore, financial socialization is more concerned with how the socialization process affects an individual's total financial well-being than it is with teaching financial skills, attitudes, standards, norms, and behaviors from childhood through adolescence.The process of becoming financially socialized is a lifelong one that is influenced by a variety of socialization agents, including classmates, instructors, family, and the media.Financial socialization is likely influenced by a number of variables, including gender, the socioeconomic status of the family and the community, race and ethnicity, the kinds of financial products that are available, public regulations, and macroeconomic trends (Gudmunson et al., 2016).The wide range of topics related to managing money, including learning about earning, spending, saving, borrowing, sharing, preserving, and growing money, insurance, taxes, wills, and investing, demonstrate how extensive financial socialization is (Alhabeeb, 1996).Spending and saving habits are formed early in life (Fox et al., 2005).These behaviors originate in the family and are taught via both formal and informal means.Through direct instruction, modeling, informal conversations, and observation, this teaching involves the intergenerational transfer of knowledge and can assist young people and adolescents in developing lifelong financial well-being-promoting behaviors (Shim et al., 2010).Young adults stated that their parents taught them the majority of their money management information and techniques (Allen, 2008).Thus, positive financial attitudes are negatively connected with unfavorable outcomes like financial distress and positively correlated with improved financial behaviors like managing money and saving (Shim et al., 2010).Nevertheless, due to disagreements about a conceptual model and metrics, the field of financial socialization remained undirected.Financial socialization theory continued to be the most popular theory in spite of this.

Parental financial Socialisation
Parental financial socialization is a process of socialization in which parents purposefully or inadvertently impart knowledge and skills on financial concerns to their children, shaping their knowledge, abilities, attitudes, and financial habits (Bakar & Bakar, 2020).Parents play a vital role in these processes by communicating with their children directly and indirectly through spoken words and by modelling behavior that they want their children to follow.More knowledge is however required regarding the financial socialization of young Black African individuals by their parents in low-income and rural South African communities.Parental financial behavior, financial monitoring, financial discussions, financial communications, and financial teaching were all used in this study to quantify parental financial socialization.
Children observe their parents' excellent or bad financial behavior, which is how parental financial behavior, as a part of parental financial socialization, manifests itself.As a result, when children grow up, they look up to their parents as role models and emulate their actions (LeBaron et al., 2019).By modelling consumer behavior, parents financially socialize their kids (Allen, 2008).Mohamed (2017) suggests that early observation of parents' financial behavior and interactions has a positive correlation with young people' financial knowledge acquisition.Otto (2009) looked into how parents helped their adolescent children learn to save money.The study discovered that children's ability to save was influenced by their parents' saving behavior.According to Webley and Nyhus (2006), parents have an impact on their children's future borrowing and saving habits since they serve as role models.Children who see their parents save understand that it's a good thing to save (Bucciol & Veronesi, 2014).Students who grew up in a financially responsible home, where parents saved money and paid their bills on time, self-reported fewer negative financial behaviors, such as misusing credit cards and making extravagant purchases, according to research by Hibbert et al. (2004) that evaluated the influence of modelling on financial behavior.
Making regulations about children's financial behavior is part of the direct financial socialization process that occurs when parents monitor their finances (Allen, 2008;Jorgensen, 2007;Kim & Chatterjee, 2013).The formation of sound financial attitudes is a clear indicator of the value of parental monitoring.Parental monitoring of their children's financial literacy has been linked, according to Norvilitis and MacLean (2010), to better financial literacy and, eventually, lower debt levels.In order to prevent undesirable habits from forming, parents might exert influence over their children by keeping an eye on their spending habits and encouraging particular behaviors (Webley & Nyhus, 2006).Giving kids an allowance helps them learn money management skills and is one way to keep an eye on their finances.They gain expertise making financial judgments as a result of learning to make their own decisions.Parents only become involved when they inquire and inspect how the funds are being used (Webley & Nyhus, 2013).
In financial socialization literature, parental financial communication is another term for financial discussions between parents and children, however the two are not synonymous.The process of having open discussions about money with their kids and soliciting their input is known as "parental financial discussion" (Kim & Torquati, 2019).This is a two-way process in which parents involve their children in significant financial decisions and the children are seen as advisors in addition to being recipients of financial knowledge.According to Webley and Nyhus (2006), having open and honest financial conversations with kids directly affects how they will behave financially in the future.By giving parents the chance to have direct discussions about money, credit, making purchases, and other related subjects, financial discussions can influence children's spending habits and attitudes (Agnew, 2018;Allen, 2008).Fulk and White (2018) suggest that the most significant overall impact on college students' money-management practices comes from family money talks.It was shown that these students had a higher likelihood of paying their credit card bills each month on time and in full.
Fostering a firm foundation for financial well-being and teaching children consumer skills, budgeting, investing, and saving are all accomplished through parental financial communication (Allen, 2008;Kim & Torquati, 2019).Parental financial communication involves talking money with kids without always needing their help.As a result, children are just informed about family financial concerns and are never actively involved.To help youngsters understand why some products are either not included in the household spending plan or are not purchased at all, parents should, for instance, take the time to explain the family's spending plan to their kids.Good financial results in adulthood are associated with parental financial communication (Isomidinova & Singh, 2017).Children's saving for their future education and their propensity to donate to charity are positively correlated with parental communication regarding charitable donations, according to a study done on children between the ages of eight and eighteen (Kim et al., 2011).
The attitudes, norms, and behaviors that will favorably impact the financial well-being of young adults are developed through parental financial teaching (Grohmann et al., 2015;Van Campenhout, 2015).According to Batten (2015), parents frequently utilize their children's allowance to teach them about money matters.The allowance serves as a tool for rewarding or discouraging particular behaviors.According to Kim et al. (2012), parents who directly teach their kids have a bigger impact on them than parents who don't.Research has additionally demonstrated that parental financial teaching affects borrowing habits.According to Grinstein-Weiss et al. (2012), increased parental teaching is linked to less instances of loan delinquency and foreclosure in young adults as well as increased wealth accumulation.According to Homan's (2015) research, young adults with the most parental financial teaching have lower debt levels than those with no financial instruction.According to Zhu (2018), parents ought to deliberately impart financial literacy and communicate unambiguous and constructive financial values to their teenagers.

Parental education level
According to Gudmunson and Danes (2011), parents' capacity to instill sound financial habits in their kids could help them have better financial results as adults.This ability is attributed to parents' educational attainment.College students' main socialization agents are their parents, according to research by Jorgensen and Salva (2010).The authors speculate that this might be because these parents are more likely to interact with their kids and give them a voice.According to Serido et al. (2010), schooling has a significant impact on parent-child financial relations, which in turn affects how the children develop their financial coping mechanisms.Graduate-and college-educated parents are better equipped to instill sound financial habits in their children because they have greater financial, social, and personal resources available for their upbringing.Additionally, by having access to financial institutions, these parents can better support their young adult children's purchase of assets (Kim & Chatterjee, 2013).

RESEARCH METHODOLOGY
In order to evaluate the link between variables and express or describe a phenomenon in terms of amount or quantity, this research used a quantitative research approach, which provides for a stable and predictable world and gives the researcher more control over external circumstances (Adams et al., 2014).Particularly when combined with planned and highly structured data collection approaches, this strategy is linked to positivist methodological concepts (Saunders et al., 2016).Data for this study were gathered by the distribution of selfadministered questionnaires to respondents' residences.The questionnaire was designed with the study's goal in mind, and it made use of both self-constructed and already-existing Likert type scales that were taken from literature.The 5-point Likert scale had five possible outcomes: strongly disagree (1), strongly agree (5), and so on.Closed-ended questions and Likert scales were employed since these methods are rapid, easy to administer, standardized, and reasonably priced (Bhandarkar & Wilkinson, 2010).Questionnaires were created with the goal of providing thorough and pertinent data for the study in mind, in order to assure face and content validity.They were also sent to scholars and financial socialization specialists to assess if the measures address all the aspects of the idea.After reviewing their suggestions, the questionnaire was amended as needed.
The low-income and rural regions of South Africa are the study area for this research.The two most rural and low-income municipalities in South Africa have been identified as Ntsika Yethu in the Eastern Cape and Featkgomo Tubatse municipality in Limpopo (StatsSA, 2022).The young black African adults in the municipalities of Intsika Yethu and Fetakgomo Tubatse were the study's population of interest.
Because these methods gave every young black African adult in the municipalities of Fetakgomo Tubatse and Intsika Yethu an equal chance of being included in the sample, this study included purposive sampling, cluster sampling, random sampling, proportional stratified sampling, and systematic sampling (Babbie, 2013).Fetakgomo Tubatse and Ntsika Yethu municipalities were sampled using purposive sampling since they are the most rural and underdeveloped regions of South Africa.Young Black African adults were then visited in each municipality after it had been divided and grouped into wards, villages, and families using cluster sampling.Each municipality's wards were sampled via random sampling, with each ward's number being written on a sheet of paper, folded, put in a box, and selected one at a time until the required number of wards was reached.To guarantee sufficient representation in this investigation, a minimum of 50% of the wards were chosen.Fetakgomo Tubatse municipality has 39 wards, 342 villages, and 189,269 households.19 wards (39x0.50)are so chosen.Ten wards (21x0.5)are chosen since the Intsika Yethu Municipality has 21 wards, 214 villages, and 40,448 households.Based on the population proportion percentage, a proportionate stratified sampling technique was employed to allocate the sample size to each municipality and each chosen ward.In order to gather data, young black African adults were visited at home using simple random sampling, which was once again applied to a subset of villages and households within each ward.
The first household and the first village from each ward were chosen at random, but the second household was visited if no respondents in the first household satisfied the inclusion requirements.Afterwards, homes were chosen at each interval using a systematic sampling technique.A methodical procedure was followed in accordance with the established interval, since the first family was chosen at random (Godwill, 2015).By dividing the sample size by the sampling wards, the interval was computed (Salkind, 2017).For example, the researcher tallied households from 1 to 15 on both sides of the street in Fetakgomo Tubatse municipality, and then the 16th (306/19) household was chosen.The interval for the Intsika Yethu municipality was 7 (78/10); as a result, the researcher totalled from 1 to 6 on both sides of the street before choosing the seventh family.If there were no young adults, the next home was called upon.This process was continued until a home containing young adults was located, at which point the counting process was restarted.The next village went via the same process up until the sample size was attained.Following that, the same protocol was used while visiting the next ward, and so on, until the data collection was finished, and the necessary sample size was reached.Using the Yamane (1967) formula, Krejcie and Morgan's (1970) table, and the suggested sample size for doing exploratory factor analysis (EFA), a sample size of 500 was determined.The questionnaires were completed by 423 young black African people, yielding an excellent and acceptable response rate of 94%.
Completed surveys were examined for any missing information, and those that were not completed were not taken into account for data analysis.Data was compiled using Microsoft Excel and then imported into SPSS version 25 for additional analysis.Validity and reliability were evaluated in this study prior to data being thoroughly statistically analyzed.Using EFA, validity was assessed by doing a KMO and the Bartlett's test of sphericity.For EFA, a KMO value of 0.50 or higher is deemed appropriate and sufficient.A significance value of 5% percent was found for Bartlett's test of sphericity, which was significant.Factor loadings of ±.30 to ±.40 are deemed minimally acceptable, since values greater than ±.50 are typically thought to be required for practical relevance (Williams et al., 2010;Hair et al., 2014).For the interpretation, this study maintained a minimum factor loading of 0.35.Since Cronbach's alpha is the most commonly used reliability metric of internal consistency, it was employed to measure reliability (Vanderstoep & Johnson, 2009).A Cronbach's alpha score of 0.60 or higher is typically regarded as reliable and satisfactory (Cohen et al., 2018).The hypotheses for this study were tested using descriptive statistics, ANOVA, tests of homogeneity of variances, robust testing of equality of means, and Tukey HSD test of homogenous subgroups.

FINDINGS AND DISCUSSIONS
The research's empirical results and interpretations are shown in this section.In this work, the KMO and Bartlett's test of sphericity were utilized to evaluate the adequacy of the data to conduct EFA.The results of the KMO and Bartlett's sphericity test are displayed in Table 1 1 demonstrated that all factors had KMOs above 0.60, ranging from 0.633 to 0.969.Bartlett's test has a significant p-value of 0.000 for all factors, which is less than 0.05.This result shows that all factors are considered valid and trustworthy, and that the correlation structure of the construct is sufficient to do a factor analysis on the items.EFA can therefore be carried out.
Table 2 presents the findings from the EFA, reliability as indicated by the Cronbach's alphas, and descriptive statistics for the study's constructs and factors.Table 2 showed that the EFA extracted five factors, each of which had items loaded onto it as predicted and with loadings greater than 0.30.The range of the overall factor loadings is 0.320 to 0.945.The Cronbach's alpha coefficients were deemed credible and acceptable as they were greater than 0.6.The means and standard deviation were supplied from the descriptive statistics.In terms of means, the majority of respondents disagreed with statements measuring parental financial communication (2.90) and agreed with statements measuring parental financial behavior (3.31), monitoring (3.23), discussion (3.12),and teaching (3.03).All factor standard deviations are high, indicating that respondents' answers varied.The biggest standard deviation, 1.38, was found for parental financial communication, suggesting that reactions to this factor's statements varied the most.As a result, the data was ready for additional analysis.As a result, the study's hypothesis can be verified.Source: SPSS The findings demonstrated that each of the parental financial socialization components had a distinct variance among the groups, with a p-value of less than 0.05 for each component.The analysis of variances in the mean scores was done using the Welch robust test of equality of means.The outcomes are shown in Table 4.The results of the test for equality of means showed that there were variations in the mean scores across parent level of education for the following categories: parental financial behavior, monitoring, communication, and teaching.Each and every p-value was less than 0.05.To identify homogenous groups and the locations of the differences, post hoc tests were performed using the Tukey HSD.The outcomes are shown in Table 5.The following sub-sub-hypotheses were tested: H1: The financial behavior of parents varies significantly depending on their educational attainment.
The findings revealed two homogeneous groups for parental financial behavior, pointing to variations within the groups.The Master's degree/Doctorate (M = 3.984), Diploma (M = 4.003), Honors degree (M = 4.192), and Bachelor's degree (M = 4.209) mean scores of Group 2 were marginally higher than the Mean scores of Group 1 for Lower than Grade 12 (M = 2.449) and Grade 12 (M = 2.569).This indicates that high parental financial behavior is more likely to be exhibited by parents with high levels of education.With F = 39.010 and p = 0.000, an ANOVA revealed a statistically significant correlation between parental financial behavior and educational attainment.Therefore, this hypothesis was accepted.H2: The amount of financial monitoring provided by parents varies significantly depending on their educational attainment.
Two homogeneous groups for parental financial monitoring were shown in the results.As a result, parental financial monitoring varied depending on the level of education of the parents.Group 2's mean scores for Degree (M = 3.702), Diploma (M = Master's degree/Doctorate (M = 3.973), and Honours degree (M = 4.075) were higher than Group 1's mean scores for Less than Grade 12 (M = 2.577) and Grade 12 (M = 2.583).This shows that parents who have higher education are more likely to keep an eye on their children's finances than parents who have less education.With F = 46.234and p = 0.012, an ANOVA revealed a statistically significant positive link between parental financial monitoring and educational attainment.As a result, this hypothesis was accepted.H3: Parental financial discussions change significantly depending on the educational attainment of the parents.
The findings for the Parental financial discussions showed that there were two similar groups.As a result, there were variations in the financial discussions between parents of different educational levels.Group 2's mean scores for the Diploma (M = 3.727), Master's degree/Doctorate (M = 3.857), Bachelor's degree (M = 4.041), and Honors degree (M = 4.132) were higher than Group 1's mean scores for Grade 12 (M = 2.197) and Lower than Grade 12 (M = 2.420).It follows that parents who hold a diploma, degree, honors degree, master's degree, or PhD are more likely to talk to their kids about money.With F = 64.876and p = 0.031, an ANOVA revealed a statistically significant correlation between parental financial talks and education level.As a result, this hypothesis gained support.H4: Parental financial communication varies significantly depending on the educational attainment of the parent.
The findings of parental financial communication showed that there were two homogeneous groups, indicating that there are variations in parental financial communication depending on parental education level.Group 2's mean scores for Master's degree/Doctorate (M = 3.717), Diploma (M = 3.834), Bachelor's degree (M = 3.977), and Honors degree (M = 4.015) were higher than Group 1's mean scores for Less than Grade 12 (M = 2.043) and Grade 12 (M = 2.083).This implies that parents who have completed their schooling are more likely to talk to their kids about money.ANOVA revealed a significantly significant correlation (F = 48.765and p = 0.000) between parental financial communication and educational attainment.As a result, this hypothesis was approved.H5: Parental financial teaching varies significantly depending on the educational attainment of the parent.
The findings indicated that there were variations in parental financial teaching across parental levels of education, with two homogeneous groups for that type of instruction.The Diploma (M = 3.768), Honors degree (M = 3.876), Bachelor's degree (M = Master's degree/Doctorate (M = 4.083), and Lower than Grade 12 (M = 2.293) mean scores for Group 1 were lower than those for Group 2. This implies that parents who have completed more education are more likely to instil financial literacy in their kids.With F = 36.453and p = 0.00, an ANOVA revealed a strong correlation between parental financial teaching and parental educational attainment.As a result, this hypothesis was approved.Table 6 presents the hypothesis decisions based on all of the hypotheses' results.Table 6.

Hypotheses Decision
H1: The financial behavior of parents varies significantly depending on their educational attainment.

Accept
H2: The amount of financial monitoring provided by parents varies significantly depending on their educational attainment.

Accept
H3: Parental financial discussions change significantly depending on the educational attainment of the parents.

Accept
H4: Parental financial communication varies significantly depending on the educational attainment of the parent.

Accept
H5: Parental financial teaching varies significantly depending on the educational attainment of the parent.

Accept
The hypothesis decisions were displayed in Table 6.Given that there are notable differences in parental financial behavior, monitoring, discussions, communication, and teaching across parental educational attainment, all of the hypotheses H1, H2, H3, H4, and H5 were accepted.Given that every hypothesis was accepted, this suggests that parental financial socialization varies significantly depending on the educational attainment of the parents.This study's findings are the first to show that parental financial socialization varies significantly depending on the educational attainment of the parents.There is no study that investigated this phenomenon.In literature, there are only similar studies that investigated the influence of parents' educational attainment on financial literacy but not financial socialisation.For example, Radianto et al. (2019) and Chotimah and Rohayati (2015) found that parent's educational attainment had an influence on financial literacy.Lusardi et al (2010) found that parents with higher education are able to cultivate knowledge of financial management in their children.The findings of the present study's investigation will provide a foundation for further research in the field of financial socialisation.

CONCLUSION AND RECOMMENDATIONS
Finding variations in parental financial socialization across parental educational attainment was the aim of this study.Parental financial behavior, financial monitoring, financial discussions, financial communication, and financial teaching were used to gauge the degree of parental financial socialization.Five hypotheses were investigated.The findings demonstrated that, across parental educational attainment, there were notable differences in the following areas: parental financial behavior, monitoring, discussions, communication, and teaching.Thus, the overall findings showed that parental financial socialization varied significantly depending on the educational attainment of the parents.As a result, children with higher educated parents are more likely to be financially socialized than those of lower education.Parental financial socialization thus benefits from parental education.The present study is among the first to look into how parental financial socialization varies depending on parental educational attainment.More research is therefore still required and has to be done.The findings of this investigation can serve as a foundation for additional research in this field in the future.This study suggests that more research be done on the variations in parental financial socialization across parental educational attainment in other areas.Additionally, it is advised that the South African government develop initiatives aimed at addressing and raising parental education levels because research indicates that parents who have completed more education are more likely to participate in financial socialization, which affects young adults' financial literacy and wellbeing.Financial service providers and industry experts need to provide financial education programmes for parents with varying educational backgrounds.The study's limitation stems from the use of a quantitative research approach to data collection through questionnaires, which limited the amount of information that could be gleaned from respondents' answers.

Table 2 .
Validity, reliability, and descriptive statistics resultsTable3presents the findings from Levene's test of homogeneity of variance between the parental level of education and the financial socialization components, which include the financial behavior, monitoring, communication, and teaching by parents.

Table 3 .
Tests of homogeneity of variances: Parental level of education and Parental financial socialisation

Table 4 .
Robust tests of equality of means for Parental level of education and Parental financial socialisation

Table 5 .
Tukey HSD test of homogenous subsets between Parental level of education and Parental financial socialization