The Financial Identity Scale (FIS): A multinational validation and measurement invariance study among emerging adults

Abstract

The transition from financial dependence on one’s parents to financial self-sufficiency is one of the most relevant transitions during emerging adulthood. It is important to have an instrument able to assess emerging adults’ financial capabilities and to detect its change over time. The current article aims to collect international evidence of the Financial Identity Scale (FIS) validity and reliability. Cross-sectional data collected from 2,501 emerging adults aged 18–25 and belonging to three different countries—U.S. ( n = 1,535), Italy ( n = 485), and Lithuania ( n = 481)—were adopted to test score structure validity, generalizability, sensitivity to difference, criterion-related validity, and internal consistency. Instead, four-wave longitudinal data, available for the American sample only ( n = 1,900), were adopted to test FIS structural stability and sensitivity to change. As recommended by the contemporary view of validity, different structural equation models were performed. Findings suggest that FIS scores are valid and reliable. The implications for researchers and practitioners are discussed.

Linking Family Financial Socialization With Its Proximal and Distal Outcomes: Which Socialization Dimensions Matter Most for Emerging Adults’ Financial Identity, Financial Behaviors, and Financial Anxiety?

“…In addition, the mediator role of the proximal outcomes was in most cases only assumed rather than empirically investigated (Gudmunson & Danes, 2011). More so, in recent years, researchers recognized that identity formation in the domain of personal finances, which is not addressed in FFS model (Gudmunson & Danes, 2011), is also an important part of financial capabilities and a potential mediator between parental financial socialization and emerging adults’ financial behaviors (Bosch, Serido, Card, Shim, & Barber, 2016; Shim, Serido, Bosch, & Tang, 2013; Sorgente, Lanz, Serido, & Shim, 2018).…”

“…Building upon a classical identity status model (Marcia, 1966), researchers suggested that the two fundamental processes of identity formation, that is, exploration (active search for information) and commitment (selecting what fits one’s worldviews best), may very well explain the development of an identity related to financial values and behaviors. In line with the classical identity status model, four statuses of financial identity were defined (Bosch et al, 2016; Shim et al, 2013; Sorgente et al, 2018). Achieved reflects one’s commitment to a financial management style that was made after exploring a range of alternatives in managing money.…”

“…The four statuses were also found to be differently associated with other proximal and distal outcomes of FFS. For example, achieved financial identity was associated with higher financial knowledge, higher financial self-efficacy, financial controllability, and responsible financial attitudes and behaviors (Shim et al, 2013; Sorgente et al, 2018).…”

The Role of Financial Identity Processes in Financial Behaviors and Financial Well-Being

“…The construct and a measure of financial identity status were introduced (Shim et al, 2013) to study emerging adults’ distinct manner of approaching and managing personal finances. Subsequent studies of financial identity status led to important insights into the formation of positive financial habits and how financial identity contributes to financial well-being; however, very few studies used a longitudinal approach to study these associations (Bosch et al, 2016; Shim et al, 2013; Sorgente et al, 2020; Vosylis & Erentaitė, 2020). Thus, the directionality of effects is in question.…”

Civic Identity in Emerging Adulthood

“…Stemming from Marcia’s paradigm, similar scales were also constructed to afford insights into developmental aspects of specific identity domains, for example, financial (e.g., Bosch et al., 2016; Sorgente et al., 2020) and religious (Stojković et al, 2020). These scales demonstrated validity and relevance in studying identity-related outcomes.…”