Family financial socialization during emerging adulthood: Insights from a cross-lagged panel model.

The present study tested the Gudmunson and Danes (2011) family financial socialization model (FFSM) using three waves of longitudinal data gathered from a college cohort of emerging adults in the United States. Specifically, we aimed to test the validity of this model in emerging adulthood (Aim 1), to verify whether the effect of the parent's socialization on a child's end financial outcome is mediated by intermediary financial outcomes (Aim 2), and to verify whether the effects found when testing the FFSM are stable across time points (Aim 3). Our findings indicate that of eight paths in the model between family socialization processes and financial socialization outcomes, seven paths were significant, thereby lending support for the validity of FFSM in emerging adulthood (Aim 1). Second, we found no mediation effects of parental financial socialization on emerging adult financial behavior and well-being via the internalization of parents' beliefs, values, and practices (Aim 2). We offer plausible explanations for this result. Last, we verified that the financial socialization processes and their effects are generally invariant across the beginning, the middle, and the end of the emerging adulthood (Aim 3). We interpret our findings in the context of the extant literature on emerging adults' transition to adult independence and provide insights for practice. (PsycInfo Database Record (c) 2024 APA, all rights reserved).

Becoming Financially Self-Sufficient: Developing a Need-Supportive and Need-Thwarting Scale for Financial Parenting of Emerging Adults.

The shift in the parent-child relationship during the transition to adulthood presumes that emerging adults progress toward financial self-sufficiency. Research indicates that financial parenting contributes to success in this transition, and these effects extend beyond the financial domain. Nevertheless, there is a lack of theory-based tools to measure relevant financial parenting aspects. By applying the six dimensions of interpersonal behaviors outlined in the Self-Determination Theory (SDT), the current study develops a scale targeting the interpersonal style of financial parenting. To validate the scale, it also tests seven preregistered hypotheses predicting internal structure and associations with relevant external variables in a sample of 600 emerging adults (Mage =24.94, SDage = 3.03, range 19-29 years; 52.3% women). The sample, diverse occupational status characteristics, was recruited from an online survey panel using the controlled quota sampling strategy. While study results provide modest evidence for a hypothesized six-factor structure and advocate instead for a more parsimonious two-dimensional one, results provide evidence for the new scale's convergent, discriminant, criterion, and incremental validity. This is the first study that brings SDT into family financial socialization research and opens a new line of research on family financial socialization, achievement of financial self-sufficiency, and emerging adults' wellbeing.

Temporal dynamics of the association between financial stress and depressive symptoms throughout the emerging adulthood.

BACKGROUND: Emerging adulthood is a life stage with elevated risk for both mental disorders and financial distress. Although a positive link between financial stress and depressive symptoms has been identified, there is a lack of delineation on the temporal dynamics of this link spanning the entire stage of emerging adulthood (roughly ages 18 to 29). METHODS: Using a statistical approach that partitions between-person from within-person variation and based on four waves of data from a college cohort (N = 2,098) throughout emerging adulthood, this study addresses this gap. RESULTS: Latent growth curve model analyses indicate that the trajectory of financial stress throughout emerging adulthood followed an inverted "U" shape, whereas that of depressive symptoms displayed a linear, decreasing trend. The positive correlations of both intercepts and slopes between financial stress and depressive symptoms indicated a co-development pattern. Classical, cross-lagged panel model analyses (i.e., a model aggregating between-person and within-person variation) demonstrated a reciprocal positive association between financial stress and depressive symptoms across waves. Random intercept, cross-lagged panel model analyses (i.e., a model disaggregating between-person and within-person effects) indicated a unidirectional positive within-person effect from depressive symptoms to financial stress across waves, controlling for between-person effects. LIMITATIONS: Shared-method and shared-informant variance may inflate the identified associations, and the correlational data precludes casual inferences. CONCLUSION: Improving young adults' mental well-being, specifically intervening depressive symptoms, could be an avenue for reducing their financial stress. Future research is pressing to examine mechanisms via which depression symptoms manifest as financial stress during transition to adulthood.

Unidirectional and bidirectional relationships between financial parenting and financial self-efficacy: Does student loan status matter?

Using longitudinal data and a cross-lagged, multigroup panel design, we examined unidirectional and bidirectional relationships between financial parenting and young adults' financial self-efficacy during the transition to adulthood. Because increasing college costs and student loan debt have changed the financial landscape of achieving higher education, we examined effects over time under 2 distinct conditions: a debt-financed college education and a debt-free college education. Analyses included the effects of 2 types of financial parenting: implicit role modeling and explicit communication. The sample was drawn from the Arizona Pathways to Life Success (APLUS) project, a cohort study of college students enrolled full time at a public university in the fall of 2007. Participants provided data at 3 time points across 5 years. The sample included 850 student loan borrowers and 800 nonborrowers. We found unidirectional patterns for both nonborrowers and borrowers depending on the type of financial parenting: Parents' explicit financial communication before college predicted higher levels of financial self-efficacy during freshman year for nonborrowers, whereas parents' implicit modeling before college predicted higher levels of financial self-efficacy during freshman year for borrowers. Financial self-efficacy led to less frequent explicit parental financial communication for nonborrowers after college but was associated with more frequent explicit parental financial communication during college for borrowers. Our findings suggest that explicit communication regarding basic finance principles is likely sufficient to support financial self-efficacy in a debt-free context, whereas observing parents' responsible financial behaviors may be beneficial for young adults who incur student loan debt. (PsycInfo Database Record (c) 2020 APA, all rights reserved).

Financial Stress and Drinking During the Transition to Adulthood: The Role of Parental Financial Support.

We investigated the concurrent and prospective associations between financial stress and drinking during the transition to adulthood in the United States, drawing from two distinct stress and coping perspectives as competing explanations for the direction of associations: the Transaction Model of Stress (TMS) and the Conservation of Resources (CoR) model. Because many emerging adults rely on continuing financial support from parents, we examined the role of parental support on these associations. We tested these associations using longitudinal structural equation modeling (SEM) with data from the National Longitudinal Study of Adolescent to Adult Health (Add Health) (N=9,026) collected at two timepoints: early emerging adulthood (ages 18-26) and five years later. Consistent with CoR, financial stress reduced concurrent drinking. Furthermore, parental financial support reduced adult children's financial stress but increased drinking in early emerging adulthood. We discuss the findings in regards to facilitating the transition to adulthood.

Do day-to-day finances play a role in relationship satisfaction? A dyadic investigation.

Prior researchers have found consistent links between financial issues and relationship outcomes. Yet, because most research is cross-sectional or examines these constructs over longer periods of time (e.g., years), the microlevel processes of how and when these changes occur are unclear. In the present study, we use interdependence theory as a guide to examine the daily fluctuations of financial satisfaction and stress as well as their daily associations with relationship quality in married and unmarried heterosexual couples. Using a dyadic 14-day daily diary research design, we found both financial satisfaction and stress demonstrated significant within-person fluctuations, with women demonstrating greater volatility in financial satisfaction than men. Given that individuals varied in their perceptions of financial satisfaction and stress from day to day, we then examined how these fluctuations were associated with daily relationship satisfaction. We expected financial satisfaction would be positively associated with relationship satisfaction for both actors and partners, whereas financial stress would be negatively associated for both actors and partners. Hypotheses were partially supported. Unmarried women's daily financial satisfaction was associated with increased relationship quality for both themselves (marginal) as well as their partners. An unexpected pattern for unmarried men's financial satisfaction was found; their increased financial satisfaction was associated with decreased relationship satisfaction. Increased financial stress was associated with decreased relationship satisfaction for unmarried men and married women (actor effects). We discuss implications for research and practice. (PsycINFO Database Record

Do Community Characteristics Relate to Young Adult College Students' Credit Card Debt? The Hypothesized Role of Collective Institutional Efficacy.

This study examines the extent of emergent, outstanding credit card debt among young adult college students and investigates whether any associations existed between this credit card debt and the characteristics of the communities in which these students grew up or lived. Using data (N = 748) from a longitudinal survey and merging community characteristics measured at the zip code level, we confirmed that a community's unemployment rate, average total debt, average credit score, and number of bank branch offices were associated with a young adult college student's acquisition and accumulation of credit card debt. For example, a community's higher unemployment rate and lower number of bank branches were associated with a young adult college student's greater accumulated debt. Community characteristics had the strongest associations with credit card debt, especially after controlling for individual characteristics (i.e., a young adult college student's race and financial independence) and familial characteristics (i.e., their parents' income and parents' discussions of financial matters while growing up at home). The findings may help to understand the unique roles that communities play in shaping children and young adults' financial capability, and how communities can be better capacitated to support the financial goals of their residents.

The Associations of Financial Stress and Parenting Support Factors with Alcohol Behaviors During Young Adulthood.

This study examined concurrent and prospective associations of financial stress (financial strain, lack of financial access, public assistance) and parenting support factors (relationship quality, living at home, financial support) with young adults' alcohol behaviors (alcohol use, heavy drinking, and problematic drinking) over a 5-year period. Analyses of National Longitudinal Study of Adolescent Health (Add Health) data (N = 7,159) showed that, over the study period, alcohol use and heavy drinking declined while problematic drinking increased. In addition, living at home and parental relationship quality were associated with fewer concurrent and prospective alcohol behaviors whereas financial strain and parents' financial support were associated with more alcohol behaviors. The implications for minimizing alcohol misuse in young adults amid uncertain economic conditions are discussed.

Financial socialization of first-year college students: the roles of parents, work, and education.

This cross-sectional study tests a conceptual financial socialization process model, specifying four-levels that connect anticipatory socialization during adolescence to young adults' current financial learning, to their financial attitudes, and to their financial behavior. A total of 2,098 first-year college students (61.9% females) participated in the survey, representing a diverse ethnic group (32.6% minority participation: Hispanic 14.9%, Asian/Asian American 9%, Black 3.4%, Native American 1.8% and other 3.5%). Structural equation modeling indicated that parents, work, and high school financial education during adolescence predicted young adults' current financial learning, attitude and behavior, with the role played by parents substantially greater than the role played by work experience and high school financial education combined. Data also supported the proposed hierarchical financial socialization four-level model, indicating that early financial socialization is related to financial learning, which in turn is related to financial attitudes and subsequently to financial behavior. The study presents a discussion of how the theories of consumer socialization and planned behavior were combined effectively to depict the financial development of young adults. Several practical implications are also provided for parents, educators and students.

Do daily stress processes account for socioeconomic health disparities?

OBJECTIVES: The present study examined the extent to which daily stressor severity and appraisals of the stressors accounted for socioeconomic disparities in health. METHODS: Data from the National Study of Daily Experiences and the Midlife in the United States Survey were combined for the current analyses, resulting in 1,031 respondents who reported on 7,229 days. RESULTS: Respondents without a high school degree experienced more severe stressors and appraised stressors as posing greater risk to their financial situation and to their self-concept than respondents with a high school or college degree. Differences in severity and stressor appraisal accounted for education differences in psychological distress and physical health symptoms. DISCUSSION: Findings suggest the importance of considering variation across stressors, particularly implications for self-concept, in understanding sources of differential stressor vulnerability.