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).

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).

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.

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.