Journal of Family and Economic Issues

, Volume 36, Issue 3, pp 421–433 | Cite as

The Role of Economizing and Financial Strain in Australian University Students’ Psychological Well-Being

  • Stuart J. Watson
  • Bonnie L. Barber
  • Suzanne Dziurawiec
Original Paper


University students have reported that they engage increasingly in more financial economizing behaviors to cope with limited resources, often to the detriment of their well-being. The objectives of this study were to investigate the mediating role of perceived financial strain between economizing behaviors and depressed mood and life satisfaction, and to compare this mediator model to the prevailing direct effects model currently reflected in the literature. Using structural equation modelling, latent-variable mediation analysis supported the notion that economizing behaviors significantly, but indirectly, predict greater depressed mood and lower life satisfaction through perceived financial strain. When examined using non-hierarchical model comparison indices, the mediation model was a superior fit to the data, compared to the direct effects model.


Economizing Financial strain Stress appraisal University students Well-being 


  1. Allison, P. D. (2003). Missing data techniques for structural equation modeling. Journal of Abnormal Psychology, 112(4), 545–557. doi:10.1037/0021-843X.112.4.545.CrossRefGoogle Scholar
  2. Anderson, J. C., & Gerbing, D. W. (1988). Structural equation modeling in practice: A review and recommended two-Step approach. Psychological Bulletin, 103(3), 411–423. doi:10.1037/0033-2909.103.3.411.CrossRefGoogle Scholar
  3. Angel, R. J., Frisco, M., Angel, J. L., & Chiriboga, D. A. (2003). Financial strain and health among elderly Mexican-origin individuals. Journal of Health and Social Behavior, 44(4), 536–551. Retrieved from
  4. Arbuckle, J. L. (2008). AMOS 17 User’s Guide. Chicago: SPSS Inc.Google Scholar
  5. Arnett, J. J. (2000). Emerging adulthood: A theory of development from the late teens through the twenties. American Psychologist, 55(5), 469–480. doi:10.1037//0003-066X.55.5.469.
  6. Australian Bureau of Statistics. (2009). Australian Social Trends (No. 4102.0). Retrieved from
  7. Australian Bureau of Statistics. (2012). Year Book Australia (No. 1301.0). Retrieved from
  8. Australian Bureau of Statistics. (2013). Australian Social Trends (No. 4102.0). Retrieved from
  9. Bacikova-Sleskova, M., Dijk, J. P., Geckova, A. M., Nagyova, I., Salonna, F., Reijneveld, S. A., et al. (2007). The impact of unemployment on school leavers’ perception of health. Mediating effect of financial situation and social contacts? International Journal of Public Health, 52(3), 180–187. doi:10.1007/s00038-007-6071-4.CrossRefGoogle Scholar
  10. Bexley, E., Daroesman, S., Arkoudis, S., & James, R. (2013). University student finances in 2012: A study of the financial circumstances of domestic and international students in Australia’s universities. Canberra: Australian Vice-Chancellors’ Committee.Google Scholar
  11. Boddington, L., & Kemp, S. (1999). Student debt, attitudes towards debt, impulsive buying, and financial management. New Zealand Journal of Psychology, 28(2), 89–93. Retrieved from
  12. Borden, L. M., Lee, S. A., Serido, J., & Collins, D. (2008). Changing college students’ financial knowledge, attitudes, and behavior through seminar participation. Journal of Family and Economic Issues, 29(1), 23–40. doi:10.1007/s10834-007-9087-2.CrossRefGoogle Scholar
  13. Bradley, G. (2006). Work participation and academic performance: A test of alternative propositions. Journal of Education and Work, 19(5), 481–501. doi:10.1080/13639080600988756.CrossRefGoogle Scholar
  14. Bradley, D., Noonan, P., Nugent, H., & Scale, B. (2008). Review of Australian higher education: Final report. Canberra: Department of Education, Employment and Workplace Relations.Google Scholar
  15. Brougham, R. R., Zail, C. M., Mendoza, C. M., & Miller, J. R. (2009). Stress, sex differences, and coping strategies among college students. Current Psychology: A Journal for Diverse Perspectives on Diverse Psychological Issues, 28(2), 85–97. doi:10.1007/s12144-009-9047-0.
  16. Burnham, K. P., & Anderson, D. R. (2004). Multimodel inference: Understanding AIC and BIC in model selection. Sociological Methods and Research, 33(2), 261–304. doi:10.1177/0049124104268644.CrossRefGoogle Scholar
  17. Chou, K. L., Chi, I., & Chow, N. W. (2004). Sources of income and depression in elderly Hong Kong Chinese: mediating and moderating effects of social support and financial strain. Aging & Mental Health, 8(3), 212–221. doi:10.1080/13607860410001669741.CrossRefGoogle Scholar
  18. Cohen, S., & Wills, T. A. (1985). Stress, social support, and the buffering hypothesis. Psychological Bulletin, 98(2), 310-357. Retrieved from
  19. Curtis, S., & Shani, N. (2002a). The effect of taking paid employment during term-time on students’ academic studies. Journal of Further and Higher Education, 26(2), 129–137. doi:10.1080/03098770220129406.CrossRefGoogle Scholar
  20. Curtis, S., & Shani, N. (2002b). The reluctant workforce: undergraduates’ part-time employment. Education and Training, 44(1), 5–10. doi:10.1108/00400910210416192.CrossRefGoogle Scholar
  21. Department of Education, Science and Training. (2009). Students 2006 - Full year. Canberra, ACT: Department of Education, Science and Training.Google Scholar
  22. Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education. (2009). Full year student summary. Canberra, ACT: Innovation.Google Scholar
  23. Dunn, N., Inskip, H., Kendrick, T., Oestmann, A., Barnett, J., Godfrey, K., et al. (2008). Does perceived financial strain predict depression among young women? Longitudinal findings from the Southampton women’s survey. Mental Health in Family Medicine, 5(1), 15-21. Retrieved from
  24. Gerrans, P., Speelman, C., & Campitelli, G. (2013). The relationship between personal financial wellness and financial wellbeing: a structural equation modelling approach. Journal of Family and Economic Issues. Advance online publication. doi:10.1007/s10834-013-9358-z.
  25. Hansen, W. L., & Rhodes, M. S. (1988). Student debt crisis: Are students incurring excessive debt? Economics of Education Review, 7(1), 101–112. doi:10.1016/0272-7757(88)90075-1.CrossRefGoogle Scholar
  26. Hayes, A. F. (2009). Beyond Baron and Kenny: Statistical mediation analysis in the new millennium. Communication Monographs, 76(4), 408–420. doi:10.1080/03637750903310360.CrossRefGoogle Scholar
  27. Hu, L. T., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural Equation Modeling, 6(1), 1–55. doi:10.1080/10705519909540118.CrossRefGoogle Scholar
  28. Hunt, A., Lincoln, I., & Walker, A. (2004). Term-time employment and academic attainment: evidence from a large-scale survey of undergraduates at Northumbria University. Journal of Further and Higher Education, 28(1), 3–18. doi:10.1080/0309877032000161788.CrossRefGoogle Scholar
  29. James, R., Bexley, E., Devlin, M., & Marginson, S. (2007). Australian university student finances 2006: final report of a national survey of students in public universities. Canberra: Australian Vice-Chancellors’ Committee.Google Scholar
  30. Kahn, J. R., & Pearlin, L. I. (2006). Financial strain over the life course and health among older adults. Journal of Health and Social Behavior, 47(1), 17–31. doi:10.1177/002214650604700102.CrossRefGoogle Scholar
  31. Khawaja, N. G., & Dempsey, J. (2008). A comparison of international and domestic tertiary students in Australia. Australian Journal of Guidance & Counselling, 18(1), 30–46. doi:10.1375/ajgc.18.1.30.
  32. Kirby, D., & Conlon, M. (2005). Comparing the economic experiences of rural and urban university students. Alberta Journal of Educational Research, 51(1), 4–17. Retrieved from
  33. Kline, R. B. (2005). Principles and practices of structural equation modeling (2nd ed.). New York: The Guildford Press.Google Scholar
  34. Kuha, J. (2004). AIC and BIC: Comparisons of assumptions and performance. Sociological Methods and Research, 33(2), 188–229. doi:10.1177/0049124103262065.CrossRefGoogle Scholar
  35. Lazarus, R. S., & Folkman, S. (1984). Stress, appraisal and coping. New York: Springer Publication Company.Google Scholar
  36. Lucas, R., & Lamont, N. (1998). Combining work and study: an empirical study of full-time students in school, college and university. Journal of Education and Work, 11(1), 41–56.CrossRefGoogle Scholar
  37. MacKinnon, D. P., Lockwood, C. M., & Williams, J. (2004). Confidence limits for the indirect effect: Distribution of the product and resampling methods. Multivariate Behavioral Research, 39(1), 99–128. doi:10.1207/s15327906mbr3901_4.CrossRefGoogle Scholar
  38. Mattsson, M., Topor, A., Cullberg, J., & Forsell, Y. (2008). Association between financial strain, social network and five-year recovery from first episode psychosis. Social Psychiatry and Psychiatric Epidemiology, 43(12), 947–952. doi:10.1007/s00127-008-0392-3.CrossRefGoogle Scholar
  39. Metcalf, H. (2003). Increasing inequality in higher education: The role of term-time working. Oxford Review of Education, 29(3), 315–329. Retrieved from
  40. Metcalf, H. (2005). Paying for unversity: The impact of increasing costs on student employment, debt and satisfaction. National Institute Economic Review, 191, 106–117. doi:10.1177/0027950105052662.CrossRefGoogle Scholar
  41. Mistry, R. S., Benner, A. D., Tan, C. S., & Kim, S. Y. (2009). Family economic stress and academic well-being among Chinese-American youth: The influence of adolescents’ perceptions of economic strain. Journal of Family Psychology, 23(3), 279–290. doi:10.1037/a0015403.CrossRefGoogle Scholar
  42. Monks, J. (2001). Loan burdens and educational attainment. Economics of Education Review, 20, 545–550. doi:10.1016/S0272-7757(00)00030-3.CrossRefGoogle Scholar
  43. Morra, D. J., Regehr, G., & Ginsburg, S. (2008). Anticipated debt and financial stress in medical students. Medical Teacher, 30(3), 313–315. doi:10.1080/01421590801953000.CrossRefGoogle Scholar
  44. Norvilitis, J. M., Merwin, M. M., Osberg, T. M., Roehling, P. V., Young, P., & Kamas, M. M. (2006). Personality factors, money attitudes, financial knowledge, and credit-card debt in college students. Journal of Applied Social Psychology, 36(6), 1395–1413. doi:10.1111/j.0021-9029.2006.00065.x.CrossRefGoogle Scholar
  45. Ross, S., Cleland, J., & Macleod, M. J. (2006). Stress, debt and undergraduate medical student performance. Medical Education, 40(6), 584–589. doi:10.1111/j.1365-2929.2006.02448.x.CrossRefGoogle Scholar
  46. Scheffer, J. (2002). Dealing with missing data. Research Letters in the Information and Mathematical Sciences, 3, 153–160. Retrieved from
  47. Schulenberg, J. E., Bryant, A. L., & O’Malley, P. M. (2004). Taking hold of some kind of life: How developmental tasks relate to trajectories of well-being during the transition to adulthood. Development and Psychopathology, 16(4), 1119–1140.Google Scholar
  48. Shim, S., Barber, B. L., Card, N. A., Xiao, J. J., & Serido, J. (2010). Financial socialization of first-year college students: The roles of parents, work, and education. Journal of Youth and Adolescence, 1–14. doi:10.1007/s10964-009-9432-x.
  49. Shim, S., & Serido, J. (2011). Young adults’ financial capability: Arizona pathways to life success for university students, Wave 2. Tucson: The University of Arizona. Retrieved from
  50. Shim, S., Xiao, J. J., Barber, B. L., & Lyons, A. C. (2009). Pathways to life success: A conceptual model of financial well-being for young adults. Journal of Applied Developmental Psychology, 30(6), 708–723. doi:10.1016/j.appdev.2009.02.003.CrossRefGoogle Scholar
  51. Stein, C. H., Hoffmann, E., Bonar, E. E., Leith, J. E., Abraham,… Fogo, W. R. (2013). The United States economic crisis: Young adults’ reports of economic pressures, financial and religious coping and psychological well-being. Journal of Family and Economic Issues, 34, 200–210. doi:10.1007/s10834-012-9328-x.
  52. Taylor, N. K. (1998). Survey of paid employment undertaken by full-time undergraduates at an established Scottish University. Journal of Further and Higher Education, 22(1), 33–38. doi:10.1080/0309877980220104.CrossRefGoogle Scholar
  53. Valentino, S. W., Moore, J. E., Cleveland, M. J., Greenberg, M. T., & Tan, X. (2013). Profiles of financial stress over time using subgroup analysis. Journal of Family and Economic Issues. Advance online publication. doi:10.1007/s10834-012-9345-9.
  54. Watts, C., & Pickering, A. (2000). Pay as you learn: student employment and academic progress. Education and Training, 2(3), 129–134. doi:10.1108/00400910010372670.CrossRefGoogle Scholar
  55. Williams, J., & MacKinnon, D. P. (2008). Resampling and distribution of the product methods for testing indirect effects in complex models. Structural Equation Modeling, 15(1), 23–51. doi:10.1080/10705510701758166.CrossRefGoogle Scholar
  56. Wray, N., & McCall, L. (2007). Money matters: students’ perceptions of the costs associated with placements. Medical Education, 41(10), 975–981. doi:10.1111/j.1365-2923.2007.02840.x.CrossRefGoogle Scholar
  57. Zimmerman, F. J., & Katon, W. (2005). Socioeconomic status, depression disparities, and financial strain: What lies behind the income-depression relationship? Health Economics, 14(12), 1197–1215. doi:10.1002/hec.1011.

Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • Stuart J. Watson
    • 1
  • Bonnie L. Barber
    • 1
    • 2
  • Suzanne Dziurawiec
    • 1
  1. 1.School of Psychology and Exercise ScienceMurdoch UniversityMurdochAustralia
  2. 2.University of ArizonaTucsonUSA

Personalised recommendations