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| Lini Zhang2 | Sophia Anong3  \n1 School of Finance and Business, Shanghai Normal University, Shanghai, China  \n2 School of Economics and Management, Shanghai Institute of Technology, Shanghai, China 3Department of Financial Planning, Housing and Consumer Economics, University of Georgia, Athens, Georgia, USA  \nCorrespondence  \nLini Zhang, School of Economics and Management, Shanghai Institute of Technology, 100 Haiquan Rd, Shanghai 201418, China.  \nEmail: [zhang.lini@hotmail.com](zhang.lini@hotmail.com)  \n[Declarations of interest: none](Declarations of interest: none)  \nFunding information  \nShanghai Pujiang Program No. 21PJC092, Shanghai Sailing Program No. 21YF1446700, and the MOE (Ministry of Education of China) Project of Humanities and Social Science No. 22YJC630202 .  \nFinancial socialization and financial distress: The role of cognitive  \nand noncognitive abilities  \nAbstract  \nThis study investigated the influence of financial socialization on financial distress and demonstrated the importance of both cognitive and noncognitive ability channels through which this relation operates. Using data from a nationally representative sample of adult U.S. residents, the results showed that adults in the bottom quintile of financial socialization are significantly more likely to experience financial distress than those in the top quintile. We also provide evidence that financial socialization is related to financial distress both directly and indirectly through cognitive ability measures of financial knowledge and financial skills, as well as the noncognitive ability measure of financial self-control. The findings highlight the importance of financial socialization in familial contexts. Implications for personal finance advocates, financial educators, children and family service providers, and policymakers are discussed.  \nKeywords: Financial socialization, Financial distress, Financial knowledge, Financial skills, Financial self-control  \nJEL classification: D10, D14, G53  \n1. Introduction  \nFinancial socialization is defined as “…the process of acquiring and developing values, attitudes, standards, norms, knowledge, and behaviors that contribute to the financial viability and individual well-being”(Danes, 1994, p. 128). Different agents (including parents, peers, school, and media) can promote financial socialization, but parents have been identified as the predominant socialization agent (Gudmunson and Danes, 2011; LeBaron et al., 2020) . Abundant evidence has shown that financial socialization has significant effects on financial literacy (Sohn et al., 2012; Deenanath et al., 2019), financial capability (Marchant and Harrison, 2020), financial behavior (Xiao et al., 2011; Zhao and Zhang, 2020), financial satisfaction (Xiao and Porto, 2017; Damian et al., 2020), and financial well-being (Shim et al., 2009; Rea et al., 2019) . In addition, financial socialization’s effect applies not only to children and emerging adults, but also to people throughout the life cycle (Lanz et al., 2020) . However, little is known about the role financial socialization plays in consumers’ exposure to financial distress.  \nFinancial distress occurs when consumers are financially insecure and have difficulties paying their mortgages, loans, credit cards, utility bills, rent, and/or medical expenses (Xu et al., 2015; Chalise and Anong, 2017; Parise and Peijnenburg, 2019) . According to TransUnion’s pre-pandemic data, one-third of individuals in the U.S. had at least one debt in collections and nearly 5 percent have declared bankruptcy in the past seven years (Keys et al., 2020) . The economic downturn and accompanying job losses and price increases attributable to the COVID-19 pandemic have exacerbated households’ financial distress further, as nearly 40 percent of U.S. households reported that they face financial difficulties in paying","cbCaif83QFkkxzUL","https://ap.wps.com/l/cbCaif83QFkkxzUL","pdf",570955,41,"English","# Abstract\n# 1. Introduction\n## Background: financial socialization\n## Background: financial distress\n## Cognitive and noncognitive abilities\n## Purpose and study approach","[{\"question\":\"What is the main question of the study?\",\"answer\":\"The study examines whether financial socialization in early life reduces consumers’ exposure to financial distress in adulthood, including how cognitive and noncognitive abilities may mediate this relationship.\"},{\"question\":\"How do cognitive and noncognitive abilities relate to financial distress in the findings?\",\"answer\":\"The results show that financial socialization relates to financial distress both directly and indirectly through cognitive ability measures (financial knowledge and financial skills) and a noncognitive ability measure (financial self-control).\"},{\"question\":\"What do the study results suggest about financial socialization across adulthood?\",\"answer\":\"Adults with the bottom quintile of financial socialization are significantly more likely to experience financial distress than those in the top quintile, highlighting the importance of financial socialization in familial contexts and across the life cycle.\"}]","Financial socialization and financial distress - The role of cognitive and noncognitive abilities | PDF",1792616793,103]