EVALUATING FINANCIAL SOCIALIZATION MODEL THROUGH FINANCIAL CAPABILITY: EVIDENCE FROM URBAN CENTRE OF PAKISTAN

Abstract

Young adults have been considered an important asset in building the society. The ability of the young financial decision-makers in the contemporary financial environment has become a heated debate. The aim of the study is to investigate the influence of Parental financial modeling, Parental child financial discussion and experimental learning of finance on financial distress, financial satisfaction and financial independence through the mediation effect of financial management behaviour and financial self-efficacy and the moderation effect of financial capability. Previous studies have measured financial socialization in terms of financial capability but no such model has been used to investigate the model of family financial socialization in Pakistan. Using purposive sampling technique the data was collected from 392 young adults. The collected data was analysed using PLS Smart 3.3.2. Study findings suggest that financial self-efficacy plays a significant role in family financial socialization model financial wellbeing. However, the role of financial management is found insignificant implying that the financial behaviour of young adults in Pakistan depends on collective family decisions. Furthermore, this study does not find any moderating effect on financial capability suggesting that financial capability develops with age and experience.