Financial Socialization in Indonesian Families: Insights from Millennial Parents

Abstract

Previous research has examined the importance of financial socialization from parents to children within the family environment. Parents who teach financial principles and practices from an early age are often associated with their children's financial management skills and independence in adulthood. This study aims to explore the financial socialization process between parents and children in Indonesian families, focusing on the specific financial contents taught and the methods used by parents. Using a qualitative approach, this study involved 33 millennial parents (economics teachers and lecturers) in Bojonegoro, Indonesia, who had children aged 7 to 15 years old. Data was collected through semi-structured in-depth interviews, participant observation, and document analysis. The research findings showed two main dimensions of financial socialization: the content of financial education and the strategies used. Parents reported teaching five core financial contents: financial planning and budgeting, earning money, saving, spending, and sharing. In terms of methods, parents used five main strategies: explicit teaching, experiential learning, parental modeling, habituation, practice and simulation. This finding has implications for parents and prospective parents to better understand and implement effective financial socialization from an early age within the family, as an important step in the context of increasing their children's financial capacity and independence. Additionally, family financial education researchers anticipate these findings will contribute to the expansion of future studies on family financial socialization.