Young adult financial identity: the roles of socialization and efficacy
Disciplines
Psychology
Abstract (300 words maximum)
Identity formation is a salient developmental task for adolescent and young adult independence (Erikson, 1968; Arnett, 2000). Previous research investigated domain-specific efficacy but not whether mastery affects financial identity development. This study takes a financial identity capital approach (Butterbaugh et al., 2020) to explore how socialization and efficacy predict young adults’ financial identity. College students (n = 651) completed an online survey measuring financial and psychosocial wellbeing. We used SPSS to conduct regression analyses of predictors of financial identity statuses. Further analyses will investigate sources of financial advice, mastery and financial self-efficacy as moderators. Direct financial teaching positively predicted moratorium, diffusion, and foreclosure, and negatively predicted achievement. Financial role modeling negatively predicted diffusion and foreclosure. Financial relationships positively predicted diffusion. Financial self-efficacy negatively predicted achievement and positively predicted moratorium. Mastery positively predicted diffusion. Findings suggest that aspects of parental financial socialization may not always relate to adaptive financial identities. Direct financial teaching may promote passive financial behavior, whereas financial role modeling may encourage youth to explore their financial identity (Khan et al., 2023). Financial self-efficacy may encourage identity exploration while mastery alone may not facilitate similar processes. Future research is needed to assess these findings across contexts and ages.
Academic department under which the project should be listed
RCHSS - Psychological Science
Primary Investigator (PI) Name
Chanler Hilley
Young adult financial identity: the roles of socialization and efficacy
Identity formation is a salient developmental task for adolescent and young adult independence (Erikson, 1968; Arnett, 2000). Previous research investigated domain-specific efficacy but not whether mastery affects financial identity development. This study takes a financial identity capital approach (Butterbaugh et al., 2020) to explore how socialization and efficacy predict young adults’ financial identity. College students (n = 651) completed an online survey measuring financial and psychosocial wellbeing. We used SPSS to conduct regression analyses of predictors of financial identity statuses. Further analyses will investigate sources of financial advice, mastery and financial self-efficacy as moderators. Direct financial teaching positively predicted moratorium, diffusion, and foreclosure, and negatively predicted achievement. Financial role modeling negatively predicted diffusion and foreclosure. Financial relationships positively predicted diffusion. Financial self-efficacy negatively predicted achievement and positively predicted moratorium. Mastery positively predicted diffusion. Findings suggest that aspects of parental financial socialization may not always relate to adaptive financial identities. Direct financial teaching may promote passive financial behavior, whereas financial role modeling may encourage youth to explore their financial identity (Khan et al., 2023). Financial self-efficacy may encourage identity exploration while mastery alone may not facilitate similar processes. Future research is needed to assess these findings across contexts and ages.