Understanding the Impact of Parents-Provided Financial Education on the Satisfaction With Life: the Moderating and Mediating Role of Consumer Characteristics

Vladimir Pashkevich, Marymount Manhattan College, USA
Deregulated and very innovative financial system demands of its users a high level of financial sophistication. Consumers have to choose from among bewildering array of financial products, such as credit cards and mortgages, which grow more complex. In fact, there is a virtual requirement that consumers bear increasing responsibility for their financial and retirement security. There is growing evidence that many consumers lack the basic financial literacy necessary to make decisions in their own best interest. Nevertheless, many researchers debate the value of financial-education programs and some researchers admit that we know very little about whether financial literacy programs actually work. The financial education received at home is more likely to address social and emotional influences, is more likely to change long-term financial behavior and enhance financial well-being than one-semester course in financial literacy. Social marketers should target parents with future-oriented educational interventions that have real-world applications and motivate parents to reach their children at their most ‘teachable’ moments. Based on a survey study using adult consumers, I explore how different levels of acquiring financial decision-making skills at home during a childhood and adolescence affect the satisfaction with life. Based on the data from 200 respondents, I find support for the expectation that the parental financial education leads to higher satisfaction with life. It is shown that the effect of the parental financial education on the satisfaction with life is fully mediated by its effect of financial literacy and economic locus of control. Finally, the hypothesized moderating effect of materialism and social-economic status is also confirmed. Given that many consumers lack the basic financial literacy necessary to make decisions in their own best interest and the “formal” financial literacy training is basically not as effective as expected, this research has clear implications for consumer welfare and public policy administrators.
[ to cite ]:
Vladimir Pashkevich (2011) ,"Understanding the Impact of Parents-Provided Financial Education on the Satisfaction With Life: the Moderating and Mediating Role of Consumer Characteristics", in NA - Advances in Consumer Research Volume 38, eds. Darren W. Dahl, Gita V. Johar, and Stijn M.J. van Osselaer, Duluth, MN : Association for Consumer Research.