Practice Makes Perfect: Experiential Learning as a Method for Financial Socialization

Abstract

Most financial socialization research focuses on two methods of learning: modeling and discussion. The purpose of this study is to qualitatively explore experiential learning as a third potential method of financial socialization used by parents. Specifically, we explored what children learned about finances through experiential learning and why parents used experiential learning as a financial socialization method. We used a multigenerational sample of emerging adults (ages 18-30 years) and their parents and grandparents (N = 115). Analyses revealed three core what themes (Working Hard, Managing Money, and Spending Wisely) and three core why themes (Learning Financial Skills, Acquiring Financial Values, and Becoming Financially Independent) related to experiential learning. These findings have implications for parents, researchers, and educators. In sum, we propose that experiential learning should be regarded as a principal method of financial socialization and should be considered in theory building, research, and pedagogy.