The Credit Card Act of 2009 reflects increased public policy concern about the risky credit behaviors of young adults. This act promotes increased responsibility of parents and implies that young adults must acquire financial knowledge and practice responsible financial behaviors. This study addresses this public issue by investigating the psychological processes underlying young adults’ risky credit card behaviors and the role of parents and financial knowledge in the financial behavior of young adults. A conceptual model based on an extension of the theory of planned behavior is proposed. The authors collected data from a sample of first-year students at a major public university. The results show that both parental norm and parental socioeconomic status are important factors that influence students’ risky credit behaviors. Furthermore, subjective financial knowledge does more to prevent risky credit behaviors than objective financial knowledge. Finally, behavioral intention is the most important factor in preventing risky credit behaviors and credit card debt accumulation. The authors draw on their findings to provide public policy implications.
The goal of this study was to consider the role of parents in the development of their children's financial independence by the time the children are old enough to enter college. Using data from 2,098 first‐year university students, we examined two pathways to emerging adults' financial, psychological, and personal well‐being, combining research on the positive effects of family financial environment and future‐oriented coping behaviors. Two findings are of particular note. The quality of parent‐child communication regarding financial topics proved to be the most potent predictor of children's financial, psychological, and personal well‐being. Further, parents' expectations had a significant indirect influence (via financial coping behaviors) on their children's well‐being. Implications for promoting financial self‐sufficiency among young adults are discussed.
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