Parent’s Beliefs and Behaviours about the Economic Socialisation, through Allowances/Pocket Money, of Their Children

This study focuses on two things: the structure and content of (modern British) parent’s beliefs about pocket money and the predictors (demographic and ideological) of parent’s attitudes towards pocket money/allowance giving. Furnham (2008) reviewed a number of “popular books” aimed at giving parents advice as to how to make their children financially literate and responsible. These formed the basis of the questionnaires used in this study. This exploratory study predicted that attitudes would group into various factors concerned with how to educate and encourage money-related activities, as well as the setting of various rules. It was also predicted that parental income would be the major determinant of belief about economic socialisation.

There is no doubt that nearly all parents are eager to ensure their children are financially literate and responsible. They do their by educating and socializing their children from an early age. Many are influenced in how their own parents taught them, though some adopt radically different practices. Not all are happy to acknowledge that children often observe and imitate the money-related behaviours of the parents as well as picking up good and bad habit from their friends.

This study also found that the parent’s social class and gender were related to their beliefs around financial education. We also found that the parents’ social class and gender were related to these beliefs. Many previous studies have also show wealth (rich vs. poor) and socio-economic (social class) differences in the way parents use their own money and socialize their children. Indeed there seems to be some inter-generational transfer on money beliefs and behaviours through this process. There is also evidence that with regard to socio-economic socialization fathers are more liberal and laissez-faire with their children than mothers. Future research would also benefit from accounting for more potential predictors of parent’s attitudes towards pocket money.

There are differences and contractions in books and papers that give advice to parents on socializing their children in general as well as specifically for financial literacy. This is one reason why this area of research is important as it attempts to show what particular socializing techniques have what precise consequences on children’s economic and financial beliefs and behaviors.

Article by Rebecca Milner and Adrian Furnham,from Norwegian Business School and University College London

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Image by Brad Sissom,from Flickr-cc