Financial Sentiment – Formation of Financial Attitudes and Beliefs

People’s feelings and attitudes toward money can have direct impact on their finances. From birth, children are exposed to how others (parents, advertisers, influencers, peers, etc.) feel about money. This exposure can influence their future relationships with money.

As children mature, their relationships with money and their emotions around managing their finances strengthen. To help our children develop positive financial sentiments, care must be taken to help them form positive relationships with money and increase their confidence when it comes to managing money.

Research, Statistics & Quotes

Self-efficacy is an important construct in social psychology; it refers to a feeling of being able to deal with a situation effectively (Bandura, 1977). In the personal financial field, self-efficacy is important to develop so financial decisions can be made more effectively.

Journal of Financial Counseling and Planning Volume 25, Issue 2

We develop our attitudes and beliefs about money in childhood. By talking often about money, and modeling good money management habits, you’ll set your children up for a future of financial success.

American Psychological Association

Money scripts – typically unconscious, trans-generational beliefs about money – are developed in childhood and drive adult financial behaviors.

Journal of Financial Planning

A person’s financial situation has a lot to do with their sentiment surrounding money. Sentiment refers to an individual’s feelings and attitudes toward money and level of confidence when making financial decisions. Using the Transtheoretical Model of Behavior Change as a guide, people in the lower stages of change will not benefit as much as those in higher stages. When working with people in lower levels of change, focus should be on their sentiments.

National Financial Educators Council, Framework for Teaching Personal Finance

NFEC Position Statement

Adults and others in contact with children should consider the financial attitudes and beliefs to which kids are exposed. They should take care to monitor the media and other influences from which children may pick up financial habits. In this regard, we commend our financial education champions who partner with us to help counteract the negative effects of such influences. On top of monitoring, parents and other influential adults should have open dialogues with children to help discuss money handling and shape positive financial beliefs.

The NFEC provides support for parents in the form of training and resources. Many of these are designed to help open lines of communication and establish financial attitudes that will help people work toward a more secure financial position.