Financial education shapes money habits

A study published in 2025 in the Journal of Family Theory & Review found that the way people handle money is closely tied to the financial education they received, especially from their parents. The research highlights that open conversations about money at home can lead to better financial knowledge and behaviors in children.

Family financial struggles influence confidence

Children who grow up in financially difficult households may develop a different relationship with money. One study found that individuals from disadvantaged backgrounds often have lower self-confidence when faced with challenges, which can affect how they approach financial decisions and risks.

Upbringing affects spending behavior

Research also shows that people raised in low-income environments may be more impulsive with money, taking greater risks and giving in to temptations more quickly. In contrast, those from high-income backgrounds tend to be more cautious, less impulsive, and slower to act on financial temptations.

Money scripts shape financial thinking

In financial psychology, the way people were raised with money influences their financial mindset, a concept known as money scripts. These include four main scenarios: avoiding money, worshipping it, linking it to status, or being constantly watchful. For example, hearing "we don't have the means" often can lead to money vigilance, a mindset marked by fear and insecurity rather than effective financial management.

Changing financial beliefs can improve habits

The research suggests that understanding one's financial beliefs and improving financial education can help reshape spending habits. By identifying and modifying these internalized money scripts, individuals can develop healthier relationships with money and better financial behaviors.