Difference Between Financial Socialisation And Financial Literacy

Abstract

Financial socialization is a process by which individuals acquire from the environment those skills, knowledge, and attitudes that are necessary to maximize their consumer role in the financial marketplace (Ward, 1974). Socialization is often viewed as a social process by which various consumer characteristics are transmitted from specific sources, commonly known as socialization agents (Churchill & Moschis, 1979). Central to consumer socialization theory, which emphasizes the importance of specifying social origins in order to grasp how consumers acquire various knowledge and behavior (McLeod & O’Keefe, 1972), is understanding the extent to which consumer socialization agents influence young people in shaping and developing consumer skills, knowledge, and attitudes Financial socialization is a learned process of acquiring knowledge about money and money management and developing skills in various financial practices such as banking, budgeting, saving, insurance, credit card use (Bowen, 2002). The family is credited with being a major source of children’s socialization; children through observing their parents, participating in financial practices, and receiving direct instruction (Beutler & Dickson, 2008; Danes, 1994; Pinto, Parent, & Mansfield, 2005).