Storytelling allows families to transmit family lore and values from parents or grandparents to children, and to help children mature, make sense of their world, learn about their ancestry, and to facilitate parent-child relationships. Family narratives are collections of stories made up by family members; they are either based on real occurrences, embellished events, or fantasy material. Such family-storytelling has been shown to have numerous advantages. For example, family narratives help children develop values through communicating limits, boundaries, and family-endorsed morality (McLeod, 1997). In addition to providing children with a clear sense of right and wrong as perceived by a given family, family stories are also used to pass along parental insights and knowledge. This process of transmitting knowledge may be critical to positive parent-child relationships, as the absence of family stories has been shown to be related to difficulties among parents to establish a caring or meaningful relationship with their children (Sherman, 1990). Similarly, the process of parental storytelling has been related to enhanced parent-child relationships (Godbole, 1982).

Family stories can be new or old. Some family stories are passed down across generations and often give strong messages about the historical background of the family, the hardships they have endured, and the values that have helped them carry on. Some stories span a single generation but have become powerful narratives with a strong message, perhaps of survival, perhaps of joy. Other stories are new, perhaps created to help a family or select members cope with a current situation. All family stories, regardless of how long they endure are shared. They are told by one family member to another for a reason, even if that reason is purely for entertainment. Many families have cherished family stories that are cause for laughter year after year; sharing such stories over and over can be a strong bonding experience. Family Stories are always that: they are about the family. Parents telling fairytales and legends are telling Stories of the Culture. This is also an important function, but a function different from that of the family story.

Family storytelling is also a powerful model for stories of the Individual, which also serves many purposes that are compatible with the larger purposes of cultural myths, legends, and fables or family narratives.