Financial Parenting, Financial Coping Behaviors, and Well‐Being of Emerging Adults

Abstract

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.

Predicting Savings for White and Black Young Adults: An Early Look at Racial Disparities in Savings and the Potential Role of Children’s Development Accounts (CDAs)

“…While some studies consider young people's savings within transaction accounts (i.e., Ashby et al 2011;Friedline et al 2011a, b;Mason et al 2010), others ask whether young people save a portion of their allowance (e.g., Furnham 1994Furnham , 1999Pritchard et al 1989;Warnarr and Van Praag 1997). Moreover, this review does not include studies that consider young people's savings within financial behavior scales, which is found in research on young people's financial socialization (e.g., Serido et al 2010;Shim et al 2009Shim et al , 2010. This is because savings is not distinguishable from the other financial behaviors in which young people engage.…”

“…Financial socialization theory contends that families provide an important context in which young people acquire financial knowledge and behaviors, including saving (Ashby et al 2011;Bowman 2011;Danes 1994;GrinsteinWeiss et al 2011;Lunt and Furnham 1996;Serido et al 2010;Shim et al 2009Shim et al , 2010Sonuga-Barke and Webley 1993;Ward et al 1977;Williams et al 2010). Financial socialization is provided through families' intentional instruction and young people's observations of their families as models (Moschis 1985;Williams et al 2010).…”

“…Part of financial socialization includes transmitting financial behaviors to young people (Danes 1994;Grinstein-Weiss et al 2011;Keister 2003Keister , 2004Moschis 1985;Pritchard et al 1989;Serido et al 2010;Shim et al 2009Shim et al , 2010Williams et al 2010), which is supported by research that finds that young people tend to adopt the financial behaviors of their families Shim et al 2009Shim et al , 2010. In a cross-sectional study of 2,098 first-year college students, researchers find that young people's financial behaviors (e.g., whether young people tracked monthly expenses, spent within a budget, saved money each month, and invested for long-term financial goals) were significantly correlated with families' same financial behaviors .…”

Much Ado about Money: Parent–Child Perceptions of Financial Disclosure

“…Further, discussing financial matters with children can reduce children's economic stress (Serido, Shim, Mishra, & Tang, 2010).…”

“You’re saying something by giving things to them:” communication and family inheritance

“…Although family discussions about money are regarded as challenging (Angel 2008) they demonstrate a positive intergenerational outcome (Serido et al 2010). For example, the perceived quality of parent-child discussions about financial topics was the strongest predictor of financial coping and wellbeing among college-age children (Serido et al 2010).…”