International Journal of Advanced and Applied Sciences, 10(5) 2023, Pages: 60-71 Contents lists available at Science-Gate International Journal of Advanced and Applied Sciences Journal homepage: http://www.science-gate.com/IJAAS.html 60 Does parental socialization affect financial literacy in Indonesia? Raden Aswin Rahadi 1 , Gianina Nadya Putri 1 , Bagus Aditya Nugraha 1 , Taufik Faturohman 1 , Alfred Boediman 2 , Kurnia Fajar Afgani 1 , Jumadil Saputra 3, * 1 School of Business and Management, Institut Teknologi Bandung, Bandung, Indonesia 2 The University of Chicago Booth School of Business, Chicago, USA 3 Faculty of Business, Economics and Social Development, Universiti Malaysia Terengganu, Kuala Terengganu, Malaysia ARTICLE INFO ABSTRACT Article history: Received 30 March 2022 Received in revised form 11 January 2023 Accepted 26 February 2023 The technological advancement of Industry 4.0 embarked on a trend of digital payment in Indonesia to promote a cashless society. However, the rapid advancement of financial digitalization in the world should be prepared for the changes of a well-literate society. In Indonesia, a cashless society has been intensively promoted. But the low level of literacy index from its younger generation, this campaign has struggled. Among several factors, this study seeks to investigate the effect of parental socialization on improving financial literacy from this generation dominated by undergraduate students in Bandung, West Java, Indonesia. This study is designed using qualitative and quantitative approaches. The qualitative data was collected by interviewing as many as 10 parents. Also, the quantitative data were gathered by distributing the online survey questionnaire to 204 public, and private undergraduate students aged 20-24 in Bandung using Google form started January to May 2020. The data collection process was chosen to solve some constraints during the pandemic of COVID-19. This study has successfully produced a conceptual framework based on parents' perspectives. Through a data analysis process using multiple linear regression, this study found that money allowance and trust variables significantly positively affect financial literacy among undergraduate students in Bandung, West Java, Indonesia. In conclusion, this study has successfully investigated the effect of parental socialization on improving financial literacy. The parents' decisions will determine their children's proficiency in money management. Also, this study found a new model that differs from the previously developed model in the United States. For the Bandung context, these two factors are perceived as effective socialization factors from the perspective of undergraduate students. Keywords: Financial literacy Undergraduate students Parental socialization Financial socialization © 2023 The Authors. Published by IASE. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). 1. Introduction *The technological advancement of Industry 4.0 embarked on a trend of mobile payment in Indonesia to promote a Cashless Society (Ilham et al., 2019; Rahadi et al., 2021; 2022). As reported by Indonesia CNBC in “IPSOS Marketing Summit 2020: Indonesia, the next cashless society” around 25 % of Indonesian use digital payment already. They perceived it as a pleasant experience. The respondents feel safer, more comfortable, and more confident using digital * Corresponding Author. Email Address: jumadil.saputra@umt.edu.my (J. Saputra) https://doi.org/10.21833/ijaas.2023.05.008 Corresponding author's ORCID profile: https://orcid.org/0000-0003-2919-5756 2313-626X/© 2023 The Authors. Published by IASE. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/) payment (Misshuari et al., 2021; Yosep et al., 2021). On the other hand, the easiness and the variety of financial products offered could cost irrational and misguided decisions that lead to financial loss. To prevent this situation, people need to be equipped with some competencies in finance, which could be mirrored by how their financial literacy level is facing this Cashless Society era. Financial literacy is the skill of examining new and complicated financial instruments and making rational judgments about the choice and extent of using tools in their best long-term interest (Mandell and Klein, 2007). Financial literacy is crucial for financial decision-making (Lusardi et al., 2010) and successful adult life (Shim et al., 2010a). People have already confronted complicated financial decisions from a young age, and financial mistakes can be costly (Lusardi et al., 2010). Moreover, departing from the importance of financial literacy expressed