Nurturing Wealth: The Financial Footprint of Parenting

May 22, 2024 | Financial Planning

The way we parent—our style of nurturing, disciplining, and guiding—can have a profound impact on how our children perceive and manage money throughout their lives.

Growing clinical and developmental research shows that parenting styles, more so than a family’s economics, demographics, or other variables, can have the largest impact on a child’s future financial outcomes. Indeed, our future outcomes can differ greatly depending on how we are raised; more specifically, on whether we are raised by authoritative, authoritarian, permissive or uninvolved parenting styles. Each style is highly likely to influence children from their personality to conduct, morals to principles, and, notably, their long-term financial success.


What does this mean for us, as caregivers?

This creates two vital opportunities for caregivers and individuals alike. First, it is paramount for caregivers to understand the known effects that certain parenting styles can have over their child’s development and financial well-being. This can help them establish care-giving priorities that better align with their child’s future success. Second, it is important for individuals to reflect on how their upbringing likely influenced their current mindset and financial behaviors, thus highlighting opportunities for self-improvement and financial betterment.

Let’s uncover the secrets to imparting financial literacy and success to the next generation through the lens of parenting styles; empowering our children to thrive in a world of financial complexity and opportunity.


Please Note: The following is for educational purposes only. This is not an exhaustive study, a psychoanalysis of any one person or family unit, nor is it intended as health care or behavioral advice. We encourage you to seek advice from professional psychologists and/or therapists should you have behavioral or mental health questions and needs.
Authoritative Parenting

Authoritative parents are typically known for being nurturing and responsive, while also setting clear expectations and boundaries. They encourage independence, open communication, understanding, and mutual respect with their children.

Children raised by authoritative parents tend to develop strong decision-making skills, critical thinking abilities, and a sense of responsibility. They are the most likely to have a stronger understanding of financial concepts and practices, such as budgeting, saving, and investing, given that they are encouraged to ask questions and be a part of related-family discussions. As a result, they are also more likely to make effective financial decisions and be financially independent as adults.

Authoritarian Parenting

Authoritarian parents are generally recognized for being strict and demanding, while focusing primarily on obedience and discipline. They enforce rules and expectations without much wiggle room for negotiation or discussion.

Children raised by authoritarian parents are more likely to struggle with autonomy and decision-making skills. It is more likely they will lack confidence in managing their finances independently and be more prone to impulsivity or rebellious financial behaviors. Without opportunities to learn and practice financial skills, such as being permitted to have financial curiosity, they are more likely to face greater challenges in believing in their abilities and achieving long-term financial success.

Permissive Parenting

Permissive parents are mostly recognized as tolerant and lenient, often avoiding confrontation and setting few rules or boundaries. They prioritize their child’s happiness and freedom over discipline, acting more as a friend than a parent.

Children raised by permissive parents lack structure and guidance when it comes to social, educational, and even financial matters. They are more likely to struggle with self-control and delayed gratification, leading to impulsive behaviors such as with their spending habits. Without clear expectations and consequences, they may find it challenging to develop the discipline and self-regulation necessary for making effective long-term financial decisions.

Neglectful/Uninvolved Parenting

Uninvolved parents are typically emotionally detached and disengaged from their children’s lives, supporting their child’s basic needs yet offering little-to-no guidance or supervision.

Children raised by uninvolved parents may lack the necessary skill-sets and emotional stability to develop effective money management skills. While these children are likely to become some of the most self-sufficient adults out of necessity, they are also more likely to feel unsupported in their efforts to learn and grow. Without constructive role models or encouragement, they typically have limited life skills that are vital for achieving financial success, such as having effective emotional regulation, relationship management, and conflict resolution strategies.


Indeed, parents have a profound responsibility in shaping their child’s future. Whether they adopt an authoritative, authoritarian, permissive, or uninvolved parenting style, or a combination of them, it is helpful to understand the life-long impact they can almost certainly have.

Let us seize this opportunity to empower our children with the knowledge, skills, and mindset necessary to navigate the complexities of personal finance with confidence and resilience. By fostering open communication, setting clear expectations, and leading by example, we can impart values of responsibility, discipline, and wise decision-making: foundation blocks for a lifetime of financial well-being.

Together, may we raise the next generation of financial leaders—individuals who are not only equipped to manage their own finances but also empowered to do something good about it.

Learn how our unique approach and personalized advice can help you grow the value of your financial portfolio.

Disclaimer: Pring Turner is a Financial Advisor headquartered in Walnut Creek CA, and is registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. The views represented herein are Pring Turner’s own and all information is obtained from sources believed to be accurate and reliable. This information should not be considered a solicitation or offer to provide any service in any jurisdiction where it would be unlawful to do so. All indices are unmanaged and are not available for direct investment. Past performance does not guarantee future results.