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The direct and indirect effects of financial socialization and psychological characteristics on young professionals' personal financial management behavior

Kirti Goyal (Department of Business Administration, School of Business and Commerce, Manipal University Jaipur, Jaipur, India)
Satish Kumar (Indian Institute of Management Nagpur, Nagpur, India)
Arvid Hoffmann (Adelaide Business School, The University of Adelaide, Adelaide, Australia)

International Journal of Bank Marketing

ISSN: 0265-2323

Article publication date: 19 June 2023

Issue publication date: 1 December 2023




Prior work expresses concern about young people's rising debt and lack of financial preparedness. This study focuses on how financial socialization and psychological characteristics affect the personal financial management behavior (PFMB) of young professionals in India. The authors examine both the direct effect of these factors and the indirect effects through financial literacy and aforementioned psychological characteristics as mediators.


The authors develop a conceptual framework based on the extant literature and empirically test its hypotheses employing partial least squares structural equation modelling (PLS-SEM).


Attitude towards money, financial self-efficacy, financial risk tolerance, financial socialization through parental direct teaching and peers, and media are all positively associated with young professionals' PFMB, whereas external locus of control and procrastination are negatively associated with their PFMB. Almost all psychological characteristics partially mediate the association between financial socialization and PFMB. Finally, financial literacy plays a partially mediating role in the association between procrastination and PFMB as well as between financial socialization and PFMB.

Practical implications

This study helps regulators and policymakers understand PFMB among young professionals. Interventions should build on the positive role of financial socialization, cultivating a good attitude towards money and financial self-efficacy, and reducing reliance on an external locus of control and procrastination. This study also helps policymakers and financial educators develop societally beneficial personal finance programs.


This research investigates social, psychological and cognitive characteristics in a comprehensive framework to further the authors’ understanding of the topic of PFMB.



The authors thank Professor Hooman Estelami, Associate editor and Reviewers for their valuable feedback during the review stages of this paper.


Goyal, K., Kumar, S. and Hoffmann, A. (2023), "The direct and indirect effects of financial socialization and psychological characteristics on young professionals' personal financial management behavior", International Journal of Bank Marketing, Vol. 41 No. 7, pp. 1550-1584.



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