Banking on Bonding: The Role of Parent-Child Relationship Quality in Parental Financial Socialization

Abstract This study explores how parent financial socialization and parent-child relationship quality interact to shape adolescents' financial self-efficacy, financial behaviors, and financial distress. The sample included 1,117 U.S. adolescents (aged 11–17) and one or two of their caregivers (total N = 2,687). Using structural equation modeling (SEM), we examined how financial socialization influenced adolescents' financial outcomes, with relationship quality with primary and secondary caregivers tested as separate moderators. Findings support Family Financial Socialization Theory, showing that socialization was significantly linked to greater financial self-efficacy, better financial behaviors, and lower financial distress. High-quality parent-child relationships amplified these associations, demonstrating that parent financial socialization has a greater impact within a healthy relationship. Surprisingly, we found that at low levels of financial socialization, financial outcomes were worse for those with high-quality relationships. Also, the direct effects of relationship quality on financial outcomes were stronger when measuring adolescents’ relationship with the secondary caregiver (mostly fathers) versus the primary caregiver (mostly mothers), suggesting that secondary caregivers provide complementary and important support to primary caregivers in providing financial socialization and shaping adolescents’ financial outcomes. Overall, these results suggest that caregivers, financial educators, and therapists should incorporate relationship quality into teaching financial skills and designing interventions.