




































39 

 

Finance, Accounting and Business Analysis 
Volume 5 Issue 1, 2023 

http://faba.bg/       
ISSN  2603-5324 

 

The relationship between parenting styles and parental financial 

socialisation 

 
Adam Ndou  

 
Department of Finance, Risk Management and Banking, University of South Africa, Pretoria, South 

Africa 

 

Info Articles   Abstract 

 

 

  History Article: 

  Submitted 20 February 2023 

  Revised 04 April 2023 

  Accepted 25 May 2023 

  

Purpose: Parenting styles are an important factor in how parents 

raise their children. This study investigated the relationship between 

parenting styles and parental financial socialisation. Parenting style 

was measured through authoritarian, neglectful, authoritative, and 

permissive. While parental financial socialisation was determined 

through parental financial teaching. 

Design/Methodology/Approach: This study adopted quantitative 

research approach and used self-administered questionnaire to 

collect data from young adults in two provinces (Gauteng and 

Mpumalanga) in South Africa. Correlation analysis was used to 

analyse data.  

 Findings: The results showed that there is a significant positive 

relationship between authoritarian, authoritative, and a permissive 

parenting styles with parental financial teaching. The results further 

showed that there is a significant negative relationship between a 

neglectful parenting style and parental financial teaching. Thus, this 

indicated that there is a significant positive relationship between 

parenting styles and parental financial socialisation. 

Practical Implications: Parents should invest more time in 

understanding and evaluating their parenting styles and adopt 

authoritarian, authoritative and permissive parenting styles as they 

were found to support and foster parental financial socialisation. 

Financial educators and government must design and implement 

financial programmes aimed at making parents aware of different 

parenting styles. 

Originality/Value: This study contributes to the existing body of 

knowledge by empirically testing the relationship between parenting 

styles and parental financial socialisation. There is no study that has 

been conducted before in South Africa. 

Paper Type:  Research Paper 

 

Keywords:  

parents, financial socialisation, 

parenting styles, financial 

teaching  

 

 

 

JEL: D14, G51, G53   

   

 
 
 
 
* Address Correspondence:   

E-mail: endouaa@unisa.ac.za 

 

  

https://orcid.org/0000-0001-7103-0184


Adam Ndou / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

 

40 

 

INTRODUCTION 
 

Parent–child interaction is amongst the most important predictors of children’s financial 

development (Strom et al. 2008). How parents interact with their children from childhood to adulthood 

determines how and whether norms, attitudes, and behaviours are learned and adopted (Drever et al. 

2015). Parents may interact with their children in distinct ways that can be linked to children’s financial 

behaviours and practices (Sabri et al. 2020). Parental influence differs according to certain factors that 

characterise how the parents interact with their children (Carlson et al. 2011). For example, Richman and 

Mandara (2013) found that parenting styles differed substantially across race and ethnic groups. Parenting 

styles are an important factors in how parents raise their children, and a choice or adoption of a particular 

parenting style may have an influence on how parents interact with their children and ultimately how 

children are raised and transition from childhood to adulthood. However, with such great influence or 

parent-child interaction, parenting styles have been underexplored by studies in parental financial 

socialisation. Thus, studies are very scant, and more studies are needed in this field. There are few notable 

studies conducted, however, these were conducted in developed countries in Europe (Koonce et al. 2008; 

Serido et al. 2010; Fang et al. 2013; Wisenblit et al. 2013; Serido and Deenanath 2016), leaving developing 

countries and African countries in particular unintentionally unattended. South Africa is one of those 

countries who are underserved by studies exploring parenting styles and parental financial socialisation. 

There is no study in South Africa that has investigated the relationship between parenting styles and 

parental financial socialisation. Thus, this study is very important in a South African context. The other 

thing that makes this study important is that parenting styles in developed countries may be different to the 

ones in South Africa, considering race, culture, and socioeconomic status. 

The more parents talk about finances, teach their children how to manage finances, and model 

healthy financial practices, the more financially independent, capable, and confident children will be as 

they transition into independent adulthood (Bleazard 2022). Parental financial teaching is critical in 

developing the values, norms, and behaviours that will positively affects young adults’ financial well-being 

(Grohmann et al. 2015; Van Campenhout 2015). Batten (2015) indicates that parents often use an 

allowance to teach their children about money matters. The allowance is used as a mechanism to reward 

or punish certain behaviours. Parents who explicitly teach their children have a greater influence on their 

children than parents who do not (Kim et al. 2012). Studies have also shown that parental financial 

teaching influences borrowing behaviour. Grinstein-Weiss et al. (2012) assert that greater parental teaching 

is associated with reduced loan delinquency and foreclosure, as well as with asset accumulation, in young 

adults. Homan (2016) found that young adults who received the most parental financial teaching have 

fewer loans than those who were never taught. This study contributed to literature and filled the research 

gap which has been there for a long time in financial socialisation. The objective was to determine the 

relationship between parenting styles and parental financial socialisation. Parenting styles were measured 

through authoritarian, neglectful, authoritative, and permissive as proposed by Baumrind (1967), while 

parental financial socialisation was determined through parental financial teaching.  

Therefore, the following hypotheses were formulated: 
H1: There is a significant positive relationship between an authoritarian parenting style and parental financial 

teaching. 

H2: There is a significant positive relationship between a neglectful parenting style and parental financial teaching. 

H3: There is a significant positive relationship between an authoritative parenting style and parental financial teaching. 

H4: There is a significant positive relationship between a permissive parenting style and parental financial teaching. 

The remainder of this article is structured as follows: Sections 2 provides literature review. Section 3 

explores research and methodology of the study. Section 4 covers analysis and findings the study. Section 

5 discussions of the study. Section 6 provides conclusions.  

 

LITERATURE REVIEW 
 

Parenting Styles 

A parenting style is defined as a collection of attitudes, behaviours, and styles of interaction with 

children that produce the emotional family context in which socialisation occurs. It is also considered a 

pattern of childrearing that is characterised by traditional and specific responses to child behaviours 

(Coplan et al. 2002). Baumrind (1967) proposed four dimensions of parenting: control, clarity of 
communication, demandingness, and responsiveness. Control refers to behavioural control — the demands 

of parents in order to integrate children into the family, and psychological control, which refers to attempts 

to control the psychological and emotional development of the child. Clarity of information relates to 

transmission of information at an appropriate developmental level, so that the child’s understanding is 

maximised. Demandingness refers to parents’ expectation of their children to behave or react in line with 



Adam Ndou / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

 

41 

 

their developmental level, and responsiveness refers to parents’ expression of warmth, concern, involvement, 

and pleasure in parenting. 

Baumrind (1967) created a typology of parenting styles, namely authoritarian, authoritative, 

permissive, or indulgent, and uninvolved or neglectful, which have been linked to children’s consumer 

socialisation processes and outcomes (Carlson et al. 2011). However, there is limited review of this 

typology in financial socialisation literature (Bucciol and Veronesi 2014), and more research is required, 

which is why it was applied in the present study. Parenting style was measured through authoritarian, 

authoritative, permissive, and neglectful.  

 

Authoritarian 
The authoritarian parenting style is characterised by high demandingness and low responsiveness 

and represents total control of the child by the parent (Baumrind 1968). According to Maccoby and Martin 

(1983), parents who follow this style show high levels of control and maturity demands and low levels of 

nurturance and clarity of communication. These parents are very involved in their children’s lives and 

believe in giving children rules and guidelines to follow. They also expect their rules to be obeyed without 

question (Carlo et al. 2007). Authoritarian parents seek high levels of control over their children because 

they view children as dominated by egotistical and impulse forces. These parents judge their children’s 

conduct according to religious, cultural, or other standards endorsed by authority. They believe in parental 

authority, keeping children in subordinate roles, restricting expression of autonomy, and not encouraging 

verbal exchanges between parents and children (Baumrind 1968). Authoritarians believe children have few 

rights but have adult responsibilities. These parents are more restrictive, and they display more hostility 

towards their children (Mikeska et al. 2017). 

Baumrind (1967) noted a widely held view that the authoritarian parenting style is more effective in 

the socialisation and shaping of children’s behaviour because of the level of parental power, which is 

exacted through reinforcement contingencies. Children’s complex behaviour patterns, especially social 

behaviours, are learned because of the positive or negative consequences with which their behaviours have 

been associated. Thus, these parents believe that their children will only display socially competent 

behaviours if they are shaped by the parents. Behaviourists and traditionalists both stress the need for 

learning and the duty of parents to make uncompromising demands of their children, thus supporting the 

authoritarian parenting style (Baumrind 1967). 

 

Authoritative 

The authoritative parenting style includes high demandingness and high responsiveness. It permits 

the child a high degree of autonomy, and is regarded as parenting that is rational, consistent, and warm 

(Baumrind 1968). These parents value children’s independence but expect disciplined conformity. 

Authoritative parents are characterised by an effort to direct children in an issue-oriented and rational 

manner (Mikeska et al. 2017). They have firm control, but do not overly restrict the child. They affirm the 

child’s present qualities, but also set standards for future conduct. Children from authoritative homes 

appear to be higher on a number of outcomes than their peers who experienced a different type of 

parenting, specifically social assertiveness, social responsibilities, and cognitive competence (Maccoby and 

Martin 1983). 

Soward (2006) revealed a positive relation between authoritative parenting and children’s impulse 

control, which is associated with a stronger future orientation, which, in turn, has been shown to affect 

financial behaviours like saving and retirement planning. Highly involved parenting has also been linked to 

a range of other behaviours that have potential impacts on financial outcomes, including cognitive 

development and motivation to learn financial matters. Bucciol and Veronesi (2014) argue that receiving 

an allowance, in itself, does not foster saving behaviour amongst young adults; however, it was found to 

be effective when combined with parental oversight of budgeting and how the money is spent. Thus, 

children of authoritative parents benefit from financial monitoring by their parents. 

 

Permissive 

Permissive or indulgent parents are less controlling and avoid the use of punishment. They also 

make fewer maturity demands of their children and are characterised by high responsiveness. Permissive 

parents attempt to behave in a non-punitive, acceptant, and affirmative manner towards their children’s 

impulses, desires, and actions. They allow their children to regulate their own activities as much as 

possible, avoid the exercise of control, and do not encourage them to obey externally defined standards 

(Baumrind 1967). 

The main characteristic of the permissive parenting style is children’s self-regulation; children are 

considered to have the right to live freely, without outside authority over things psychic and somatic, 

meaning that children are allowed to eat when they are hungry, clean only when they want to, are never 



Adam Ndou / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

 

42 

 

scolded, or spanked, and are always loved and protected (Baumrind 1968). Neill (1960) argues that to 

impose anything by authority on children is wrong. Children should not do anything until they are of the 

opinion that is should be done. Thus, any attempt to shape children’s behaviour prematurely involves an 

unnatural and unnecessary infringement on children’s freedom, and results in neurosis and insufficiency. 

Permissive parents believe that children should be given freedom to regulate their own behaviours. 

The permissive style of parenting has received much criticism. Pong et al. (2005) posit that children 

of permissive parents have less ability to delay gratification. They want to buy something immediately, and 

if they do not have the money, they will borrow it. This indicates a possible relationship between 

impulsivity and lack of parental guidance (Pong et al. 2005). Permissive parents employ little control in 

their interactions with their children. They communicate total acceptance of the child’s behaviour, do not 

use punishment, and often give in to the child’s desires and pleading, because they do not believe in a 

family hierarchy. These parents tend to avoid confrontation and encourage children to be responsible for 

their own actions (Estlein 2016). 

 

Neglectful 
Neglectful or uninvolved parents are characterised by low demandingness and responsiveness. 

Thus, they are low in nurturing, and also low in authoritarian characteristics. They are not involved 

emotionally with their children, provide minimal supervision, and maintain distant relations with their 

children (Estlein 2016). They neither seek nor exercise much control over their children, perhaps because 

they are self-involved and deny or wish to avoid obligations to provide guidance. Their limited 

restrictiveness is coupled with a relative lack of warmth or anxious concern about the child’s development. 

They see children as having few rights or responsibilities that require parental attention, and as being 

capable of meeting many of their own needs, therefore requiring little communication and reinforcement 

(Pong et al. 2005). Neglectful parents do little or nothing to monitor or directly encourage their children’s 

ability to function autonomously, and do not encourage their children’s self-regulation or impose control 

over the children’s behaviour (Carlson and Grossbart 1988). This leads to their children having low self-

esteem and slower emotional development. Neglectful parents are unresponsive; they do not provide 

structure or monitor their children’s behaviour, and, in many cases, they neglect their parenting 

responsibilities altogether (Bednar and Fisher 2003). 

 

Parental Financial Teaching 
Young people spend a considerable amount of time with their parents; therefore, direct parental 

financial teaching could occur in a very natural way, particularly when adolescents participate in financial 

affairs by obtaining and handling financial resources within the family environment (Gudmunson and 

Danes 2011). Moreover, parents can share their own knowledge, financial choices, and financial norms 

with their adolescent children while teaching them. This enables young people to accumulate objective 

financial knowledge and increases the likelihood that they will emulate their parents’ financial behaviours. 

Parental financial socialisation through a mechanism of direct financial teaching could influence 

adolescents’ financial behaviour and financial outcomes. Thus, parents should intentionally teach financial 

knowledge, and convey clear and positive financial norms to their adolescent children (Zhu 2018). Parents 

also actively influence their children to make better decisions and learn about finance by trying to instil 

good financial behaviour in their children (Grohmann et al. 2015). Parental financial teaching has an 

influence on financial literacy (Antoni and Saayman 2021). Direct financial teaching relates to how 

parents teach their children about financial matters throughout childhood, until adulthood (Moschis 1985). 

Shim et al. (2010) assert that explicit financial teaching is linked with children’s financial learning and 

future behaviours. 

 

Conceptual Model and Hypotheses  

This study adopted the financial socialisation theory by Danes (1994) to develop hypotheses and 

conceptual model, which posits that financial socialisation is the process whereby people obtain and 

develop financial knowledge, values, and behaviour that affect their financial behaviour and money 

management. Financial socialisation is a life-long process that is influenced by numerous socialisation 

agents, such as family, teachers, peers, and the media. Factors such as gender, socio-economic conditions 

of the family and the surrounding community, race, ethnicity, types of financial products that are 

available, public policies, and macro-economic trends are likely influential in financial socialisation 

(Gudmunson et al. 2016). Figure 1 indicates the conceptual model and four hypotheses of the study.   

 

 

 

 



Adam Ndou / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

 

43 

 

       Independent variables                                                                         Dependent variable 

                                           

                                                  

 

                                                   H1   

 

                                               

                                                 H2                                                                                                                                                                                                                                                                                                                                                                                            

                                             

                                                                                                                                                                                                                                                                                                                                                           

                                                 H3 

   

                                                

                                                 H4 

                                                                                 

 

 
Source: Author 

 Figure 1. Conceptual model of the study  

 

As depicted in figure 1 the following hypotheses were developed: 

 

H1: There is a significant positive relationship between an authoritarian parenting style and parental 

financial teaching. 

H2: There is a significant positive relationship between neglectful parenting style and parental financial 

teaching. 

H3: There is a significant positive relationship between an authoritative parenting style and parental 

financial teaching. 

H4: There is a significant positive relationship between a permissive parenting style and parental financial 

teaching. 

 

METHODS 

 

This research used a quantitative research approach, as it allows for stable and predictable world 

which gives the research more control over external factors in testing the relationship between variables 

and expressing or explaining a phenomenon in amount or quantity (Adams et al. 2014). When using this 

approach, researchers gather data in such a way that the data are easy to quantify, allowing for statistical 

analysis (Patten and Newhart 2018). This study used self-administered questionnaire which were 

distributed to respondents’ homes to collect data. Questionnaire were design in line with the objective of 

the study and used existing Likert type scales adopted from literature and also self-constructed scales. The 

Likert scale consisted of 5-point scales that ranged from strongly disagree (1) to strongly agree (5). 

The population for this study is young adults in South Africa between the age of 18 and 35 from all 

races. To ensure representation of the population of young adults in South Africa, urban areas, and rural 

areas were included in the sample. This was done through purposive sampling method where sampling is 

done to meet a particular motive (Babbie 2013). South Africa has nine provinces, three provinces 

(Gauteng, Western Cape, and Free state) are predominantly urban, while six provinces (Eastern Cape, 

Limpopo, Mpumalanga, North-West, Kwazulu-Natal and Northern Cape) are predominantly rural. 

Simple random sampling was used where firstly urban provinces were sampled and thereafter rural 

provinces were sampled. Provinces names were written on a piece of paper ,folded and placed in a small 

box, shuffled and picked one by one, the first province picked was included in the sample, in total two 

provinces were selected, one from urban and the other one from rural. Thus, from urban provinces, 

Gauteng was selected and Mpumalanga from the rural provinces. Therefore, young adults in Gauteng and 

Mpumalanga were visited at their homes to collect data. A sample size 0f 500 was set, calculated through 

Yamane (1967) formula, Krejcie and Morgan’s (1970) table and considering the recommended sample size 

for conducting Exploratory Factor Analysis (EFA). A total of 423 young black African adults completed 

the questionnaire, giving a response rate of 94%, which is good and acceptable. 

To ensure validity and reliability, construct validity and Cronbach alpha were used in this study. 

Construct validity was assessed through EFA by conducting a Kaiser-Meyer-Olkin (KMO) and Bartlett’s 

test of sphericity. The acceptable value of KMO which is suitable and adequate for EFA is 0.50 and above. 

Neglectful style 

Authoritarian style 

Permissive style 

Authoritative style 

Parental financial 
teaching 



Adam Ndou / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

 

44 

 

While Bartlett’s test of sphericity is significant for EFA if the significance value is (p < 0.05). Factors 

loadings of ±0.30 to ±0.40 are minimally acceptable, values greater than ±0.50 are generally considered 

necessary for practical significance (Hair et al. 2014). This study retained a minimum factor loading of 

0.30 for interpretation. Cronbach alpha was used to measure reliability, as is the most widely used 

reliability measure of internal consistency (VanderStoep and Johnson 2009). Cronbach alpha with a score 

of 0.60 and more were accepted and considered to be reliable (Cohen et al. 2018). Thereafter, correlation 

analysis was used in this study to test the relationship between parenting styles and parental financial 

socialisation. 

 

RESULT AND DISCUSSION 

 

The objective of this study was to determine the relationship between parenting styles and parental 

financial socialisation. So, before this relationship can be tested it was important to assess the suitability of 

data for conducting factor analysis. KMO and Bartlett’s test of sphericity were used in this study. Table 1 

shows the results of the KMO and Bartlett’s test of sphericity.  

 

Table 1. KMO and Bartlett’s Test 

Factors                                                   Kaiser-Meyer-Olkin Measure of          

Sampling                                                            

Adequacy (KMO) 

      Bartlett’s Test of Sphericity 

  Approx.  

  Chi-Square          df          Sig. 

Authoritarian parenting style                          0.699                                    715.134                 9         0.000 

Neglectful parenting style                                0.766                                    2314.514               38       0.000 

Authoritative parenting style                           0.612                                    316.733                 11       0.000 

Permissive parenting style                               0.869                                    2145.534               12       0.000 

Parental financial teaching                              0.768                                    1924.345               13       0.002 

Source: SPSS 

 

Table 1 showed that the KMO for all factors ranged from 0.612 to 0.869, above 0.60. The p-value of 

the Bartlett’s test for all factors (p = 0.000) is smaller than 0.05, is significant. This result is an indication 

that the correlation structure of construct is adequate to conduct a factor analysis on the items and that all 

factors are regarded as valid and reliable. 

Table 2 shows the results of the EFA, reliability by depicting the Cronbach’s alphas, and descriptive 

statistics for the constructs and factors of the study.  

 

Table 2. Validity, reliability, and descriptive statistics results 

Factors                                                         EFA factor loadings                   CA         Descriptive  

                                                                                                                                           statistics 

Variables                                                    Items   Highest  Lowest           α               μ           SD 

Authoritarian parenting style                       7         0.837        0.642          0.931         3.42     1.53 

Neglectful parenting style                             3        0.636         0.524         0.645          3.83     1.32 

Authoritative parenting style                        5        0.882         0.531         0.932          3.14     1.24 

Permissive parenting style                            4        0.826         0.509         0.906          2.80     1.42 

Parental financial teaching                           6        0.951         0.320         0.909          3.03     1.29 

Source: SPSS 

 

Table 2 indicated that five factors were extracted by the EFA, with all items loaded onto the factors 

as expected, with loadings of above 0.30.  The overall factor loadings range from 0.320 to 0.951. The 

Cronbach’s alpha coefficients were above 0.6 and were acceptable and considered reliable. The descriptive 

statistics provided the means and standard deviation. Regarding the means, majority of respondents agreed 

with the statements measuring neglectful parenting style (3.83), authoritarian parenting style (3.42), 

Authoritative parenting style (3.14), parental financial teaching (3.03) and disagreed with statements 

measuring permissive parenting style (2.80). The standard deviations of all factors are high showing that 

the respondents’ responses varied. However, authoritarian parenting style had a highest standard deviation 

of 1.53 indicating that the responses varied mostly with regard to this factor’s statements. While 

authoritative parenting style had the lowest standard deviation of 1.42. 

Correlation analysis was used in this study to test the relationship between parenting styles and 

parental financial socialisation. Correlation analysis is a statistical test that examines the strength of 

association between two variables by calculating a correlation coefficient (Verma 2013). Table 3 shows the 



Adam Ndou / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

 

45 

 

correlations between Parenting style, namely Authoritarian (AUTR), Neglectful (NE), Authoritative (AUTV), 

and Permissive (PER), and the components of Parental financial socialisation, namely Parental financial teaching 

(PFT). All the factors had a p-value of less than 0.05, and all were significant. 

 

Table 3. Correlation analysis 

                             PFT                      AUTR                    NE                      AUTV                    PER 

PFT 

AUTR 

NE 

AUTV 

PER 

1 

0.0733** 

-0.377** 

0.697** 

 

1 

-0.349** 

0.673** 

 

 

1 

0.357** 

0.499** 

 

 

 

1 

-0.677** 

 

 

 

 

1 0.640**                                   -0.701** 

**. Correlation is significant at the 0.01 level (2-tailed). 

 

H1: There is a significant positive relationship between an authoritarian parenting style and parental 

financial teaching. 
Pearson’s r-value for Authoritarian style and Parental financial teaching was 0.733. Therefore, 54% 

(0.733)2 of the variation in Parental financial teaching was explained by Authoritarian style. This meant that, 

when Authoritarian style increased, Parental financial teaching also increased. Therefore, there is a large 

significant positive linear relationship between an authoritarian parenting style and parental financial 

teaching. Therefore, this hypothesis was accepted. 

 

H2: There is a significant positive relationship between a neglectful parenting style and parental 

financial teaching. 

Pearson’s r-value for Neglectful style and Parental financial teaching was -0.377. Thus, -14 % (−0.377)2 

of the variation in Parental financial teaching was explained by Neglectful style. This meant that, when 

Neglectful style increased, Parental financial teaching decreased. Thus, there is a medium significant negative 

linear relationship between a neglectful parenting style and parental financial teaching. Thus, this 

hypothesis was rejected. 

 

H3: There is a significant positive relationship between an authoritative parenting style and parental 

financial teaching. 
Pearson’s r-value for Authoritative style and Parental financial teaching was 0.697. Therefore, 48 % 

(0.697)2 of the variation in Parental financial teaching was explained by Authoritative style. This meant that, 

when Authoritative style increased, Parental financial teaching also increased. Therefore, there is a large 

significant positive linear relationship between an authoritative parenting style and parental financial 

teaching. Therefore, this hypothesis was accepted. 

 

H4: There is a significant positive relationship between a permissive parenting style and parental 

financial teaching. 
Pearson’s r-value for Permissive style and Parental financial teaching was 0.640. Therefore, 41 % 

(0.640)2 of the variation in Parental financial teaching was explained by Permissive style. This meant that, 

when Permissive style increased, Parental financial teaching also increased. Thus, there is a large significant 

positive linear relationship between a permissive parenting style and parental financial teaching. Therefore, 

the hypothesis was accepted. 

 

Considering the results of the correlation the decision to accept or reject hypothesis is indicated in table 4.  

 

Table 4: Hypotheses decision 

Hypotheses                                                                                                                                    Decision 

H1: There is a significant positive relationship between an authoritarian                                  Accept 

parenting style and parental financial teaching. 

H2: There is a significant positive relationship between a neglectful parenting                          Reject 

style and parental financial teaching. 

H3: There is a significant positive relationship between an authoritative                                   Accept 

parenting style and parental financial teaching. 

H4: There is a significant positive relationship between a permissive                                         Accept 

Parenting style and parental financial teaching. 

Source: Author’s own compilation 

 



Adam Ndou / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

 

46 

 

Therefore, based on table 4 hypotheses H1, H3, and H4 are accepted, while H2 is rejected. Thus, 

because three hypotheses are accepted while one is rejected, it indicates that there is a significant positive 

relationship between parenting styles and parental financial teaching. The results indicated that there is 

indeed a significant positive relationship between parenting style and parental financial socialisation. This 

result supports those of other studies that examined this relationship (Koonce et al. 2008; Serido et al. 

2010; Fang et al. 2013; Wisenblit et al. 2013; Serido and Deenanath 2016). For example, Wisenblit et al. 

(2013) investigated the influence of parental styles on children’s consumption, and also compared the 

different parenting styles. They found that nurturing mothers are more aware of advertising aimed at 

children, and that they talk more to their children about advertising and consumption than authoritarian 

mothers. 

 

CONCLUSION 

 

The objective of this study was to determine the relationship between parenting styles and parental 

financial socialisation. Parenting style was measured through authoritarian, neglectful, authoritative, and 

permissive. While parental financial socialisation was determined through parental financial teaching. 

Four hypotheses were formulated and tested. H1: there is a significant positive relationship between an 

authoritarian parenting style and parental financial teaching, H2: there is a significant positive relationship 

between a neglectful parenting style and parental financial teaching, H3: there is a significant positive 

relationship between an authoritative parenting style and parental financial teaching, H4: there is a 

significant positive relationship between a permissive parenting style and parental financial teaching. 

Correlation analysis was used to test these relationships. The results showed that there is a significant 

positive relationship between an authoritarian, an authoritative, and a permissive parenting styles with 

parental financial teaching. The results further showed that there is a significant negative relationship 

between a neglectful parenting style and parental financial teaching. Therefore, hypotheses, H1, H3 and 

H4 were accepted, while H2 was rejected. Thus, it can be concluded, based on the results, that there is a 

significant positive relationship between parenting styles and parental financial socialisation. This study’s 

results are in line with those of the previous studies that found a positive relationship between parenting 

style and parental financial socialisation. Parenting style is very important in financial socialisation. Thus, 

parents must understand that a parenting style they adopt will have an impact on parental financial 

socialisation because are also expected to teach their children about money matters at an early age, so that 

they develop financial skills and are able to become financially independent during adulthood. Therefore, 

this study recommends that parents invest more time in understanding and evaluating their parenting 

styles and adopt authoritarian, authoritative and permissive parenting styles as they were found to support 

and foster parental financial socialisation. Financial educators must design and implement financial 

programmes aimed at making parents aware of different parenting styles and their impact of parental 

financial socialisation. Government must introduce a course in basic adult education programme to teach 

parents about parenting styles and financial socialisation. There is an increasing need to explore the field of 

financial socialisation further and investigate other factors which have the relationship with parental 

financial socialisation. For example, future studies can look at parent socioeconomic status, culture, and 

gender role in parental financial socialisation. 

 

 

REFERENCES 

 
Adams, J., H. T. A. Khan, and R. Raeside. 2014. Research methods for business and social science students. 2nd 

edition. London: Sage Publications. 

Antoni, X. L., and M. Saayman. 2021. The influence of financial socialisation mechanisms on young 
financial professionals’ financial literacy levels in the Eastern Cape. Academy of Accounting and 

Financial Studies Journal, 25(3): 1-15. 

Babbie, E. 2013. The practice of social science research. International edition. 13th edition. Wadsworth: 

Cengage Learning. 
Baumrind, D. 1968. Authoritarian versus authoritative parental control. Adolescence, Fall: 255-272. 

Baumrind, D. 1967. Child care practices anteceding three patterns of preschool behaviour. Genetic 

Psychology Monographs, 75(1): 43-88. 

Batten, G. P. 2015. Consumer socialisation in families: how parents teach children about spending, saving 

and importance of money. PhD thesis. Virginia Polytechnic Institute and State University, Virginia, 

USA. 

Bednar, D. E., and T. D. Fisher. 2003. Peer referencing in adolescent decision making as a function of 
perceived parenting style. Adolescence, 38(152): 607–621. 



Adam Ndou / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

 

47 

 

Bleazard, E. J. 2022. Financial literacy: from parent to child. Family Perspectives, 3(1): 1-5. 

Bucciol, A., and M. Veronesi. 2014. Teaching children to save: what is the best strategy for lifetime 
savings? Journal of Economic and Psychology, 45: 1-17. 

Carlo, G., M. McGinley, R. Hayes, C. Batenhorst, and J. Wilkinson. 2007. Parenting styles or practices? 
Parenting, sympathy, and prosocial behaviours among adolescents. The Journal of Genetic Psychology, 

168(2): 147-176. 
Carlson, L., and S. Grossbart. 1988. Parental style and consumer socialization of children. Journal of 

Consumer Research, 15(1): 77-94. 

Carlson, L., R. N. Laczniak, and C. Wertley. 2011. Parental style: the implications of what we know and 
think we know. Journal of Advertising Research, 51(2): 427-435. 

Cohen, L., L. Manion, and K. Morrison. 2018. Research methods in education. 8th edition. London: 

Routledge. 

Coplan, R.J., P. D. Hastings, D. G. Lagace-Seguin, and C. E. Moulton. 2002. Authoritative and 

authoritarian mothers’ parenting goals, attributions, and emotions across different childrearing 

contexts. Parenting Science and Practice, 2, 1-26. 

Danes, S. M. 1994. Parental perceptions of children’s financial socialisation. Journal of Financial Counselling 

and Planning, 5:127-146. 

Drever, A. I., E. Odders-White, C. W. Kalish, N. M. Else-Quest, E. M. Hoagland, and E. N. Nelms. 

2015. Foundations of financial well-being: insights into the role of executive function, financial 
socialisation, and experience-based learning in childhood and youth. Journal of Consumer Affairs, 

49(1): 13-38. 
Estlein, R. 2016. Parenting styles. 1st edition. New York: John Wiley & Sons. 

Fang, M. C., S. D. Hannah, and S. Chatterjee. 2013. The impact of immigrant status and racial/ethnic 
group on differences in response to a risk aversion measure. Journal of Financial Counseling and 

Planning, 24(2): 63-76. 

Grinstein-Weiss, M., J. S. Spader, Y. H. Yeo, C. C. Key, and E. B. Freeze. 2012. Loan performance 
among low-income households: does prior parental teaching of money management matter? Social 

Work Research, 36(4): 257-270. 

Grohmann, A., R. Kouwenberg, and L. Menkhoff. 2015. Childhood roots of financial literacy. Journal of 

Economic Psychology, 51: 114-113. 

Gudmunson, C. G., and S. M. Danes. 2011. Family financial socialisation: theory and critical review. 
Journal of Family and Economic Issues, 32: 644-667. 

Gudmunson, C. G., S. K. Ray, and J. J. Xiao. 2016. Financial socialisation. In J.J. Xiao, Handbook of 

consumer finance research. 2nd edition. Zurich: Springer. 

Hair, J. F. Jr., W. C. Black, B. J. Babin, and R. E. Anderson. 2014. Multivariate data analysis. 7th edition. 

Harlow: Pearson. 

Homan, A. M. 2016. The influence of parental financial teaching on saving and borrowing behaviour. 

MSc thesis. University of Groningen, Groningen, Netherlands. 
Kim, J., S. Chatterjee, and J. E. Kim. 2012. Debt burden of young adults in the United States, Journal of 

Financial Counselling and Planning, 23(2): 55-67. 

Koonce, J. C., Y. Mimura, T. A. Mauldin, A. M. Rupured, and J. Jordan. 2008. Financial information: is 
it related to savings and investing knowledge and financial behavior of teenagers? Journal of Financial 

Counseling and Planning, 19(2): 19-28. 

Krejcie, R. V., and D. W. Morgan. 1970. Determining sample size for research activities. Educational and 

Psychological Measurement, 30: 607-610. 

Maccoby, E. E., and J. A. Martin. 1983. Socialisation in the context of the family: parent-child interaction, 4th 

edition. New York: John Wiley & Sons. 

Mikeska, J., R. L. Harrison, and L. Carlson. 2017. A meta-analysis of parental style and consumer 
socialization of children. Journal of Consumer Psychology, 27(2): 245-256. 

Moschis, G. P. 1985. The role of family communication in consumer socialisation of children and 
adolescents. Journal of Consumer Research, 11(4): 898-913. 

Neill, A. S. 1960. A radical approach to child rearing. New York: Hart Publishing Co. 

Pong, S., L. Hao, and E. Gardner. 2005. The roles of parenting styles and social capital in the school 
performance of immigrant Asian and Hispanic adolescents. Social Science Quarterly, 86(4): 929-950. 

Richman, S. B., and J. Mandara. 2013. Do socialization goals explain differences in parental control 
between black and white parents? Family Relations, 62: 625-636. 

Sabri, M. F., C. G. Gudmunson, T. S. Griesdorn, and L. R. Dean. 2020. Influence of family financial 
socialization on academic success in college. Journal of Financial Counselling and Planning, 31(2): 267-

283. 



Adam Ndou / Finance, Accounting and Business Analysis, Volume 5, Issue 1, 2023 

 

48 

 

Serido, J., and V. Deenanath. 2016. Financial parenting: promoting financial self-reliance of young 
consumers. In: Handbook of consumer finance research. 2nd edition. New York: Springer Science and 

Business Media. 

Serido, J., S. Shim, A. Mishra, C. Tang. 2010. Financial parenting, financial coping behaviors, and well-
being of emerging adults. Family Relations, 59(4): 453-464. 

Shim, S., B. L. Barber, N. A. Card, J. J. Xia, and J. Serido. 2010. Financial socialisation of first-year 

college students: the roles of parents, and education. Journal of Youth and Adolescence, 39(12): 1457-

1470. 

Soward, K. W. 2006. Resilience and self-control in at-risk preschool children: influences of maternal 
parenting style and self-control. The Sciences and Engineering, 67: 11-69. 

Strom, R. D., P. S. Strom, and T. E. Beckert. 2008. Comparing black, Hispanic and white mothers with a 
national standard of parenting, Adolescence, 43: 525-545. 

Van Campenhout, G. 2015. Revaluing the role of parents as financial socialisation agents in youth 
financial literacy programs. The Journal of Consumer Affairs, 49(1): 186-222. 

VanderStoep, S. W. and D. D. Johnson. 2009. Research methods for everyday life: blending qualitative and 

quantitative approaches. San Francisco: Wiley. 

Wisenblit, J.Z., R. Priluck, S. F. Pirog. 2013. The influence of parental styles on children’s consumption. 
Journal of Consumer Marketing, 30(4): 320-327. 

Yamane, T. 1967. Statistics: an introductory analysis, 2nd edition. New York: Harper and Row. 

Zhu, A. Y. F. 2018. Parental socialisation and financial capability among Chinese adolescents in Hong 
Kong. Journal of Family and Economic Issues, 39: 566-576. 

 

 

Note* This study is based on the PhD’s thesis entitled “The influence of parental financial socialisation on 

financial literacy of young black African adults in rural and low-income area in South Africa” of the 

corresponding author. 


