The Association of Financial Socialization with Financial Self-Efficacy and Autonomy: A Study of Young Students in India

The idea that young students learn a wide range of financial beliefs, attitudes, and behaviors from family members supports the theory that family communication about money plays a key role in developing certain sets of financial behaviors in the young students that they can use more broadly in adulthood. However, less is known about the relationship between this financial socialization and financial self-efficacy and financial autonomy, which is the subject of this study. Financial socialization is an independent variable comprising four attributes: financial discussion with parents, financial discussion with peers, observation of parents’ financial behavior, and observation of peers’ financial behavior. Financial self-efficacy and financial autonomy act as dependent variables. The primary data is collected from 1300 post-graduate and undergraduate students enrolled in colleges across three states of India across various disciplines, are the young students who are the users of financial products and services. I use two multiple regression models. The first explains the positive association between attributes of financial socialization and significant predictors of financial self-efficacy, while the second finds that the observation of peers’ financial behavior is a nonsignificant predictor for financial autonomy in the context of Indian young students. The results also show that among all significant predictors, financial discussion is a comparatively more influencing variable than others. The results of this research study will be useful to policymakers, counselors, and education providers in their framing and development of financial education programs based on family financial socialization.