Abstract
This cross-sectional study tests a conceptual financial socialization process model, specifying four-levels that connect anticipatory socialization during adolescence to young adults’ current financial learning, to their financial attitudes, and to their financial behavior. A total of 2,098 first-year college students (61.9% females) participated in the survey, representing a diverse ethnic group (32.6% minority participation: Hispanic 14.9%, Asian/Asian American 9%, Black 3.4%, Native American 1.8% and other 3.5%). Structural equation modeling indicated that parents, work, and high school financial education during adolescence predicted young adults’ current financial learning, attitude and behavior, with the role played by parents substantially greater than the role played by work experience and high school financial education combined. Data also supported the proposed hierarchical financial socialization four-level model, indicating that early financial socialization is related to financial learning, which in turn is related to financial attitudes and subsequently to financial behavior. The study presents a discussion of how the theories of consumer socialization and planned behavior were combined effectively to depict the financial development of young adults. Several practical implications are also provided for parents, educators and students.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50, 179–211.
Ajzen, I., & Madden, T. J. (1986). Prediction of goal-directed behavior: Attitudes, intentions, and perceived behavioral control. Journal of Experimental Social Psychology, 22, 453–474.
Allen, M. W., Edwards, R., Hayhoe, C. R., & Leach, L. (2007). Imagined interactions, family money management patterns and coalitions, and attitudes toward money and credit. Journal of Family and Economic Issues, 28, 3–22.
Arnett, J. J. (2004). Emerging adulthood: The winding road from late teens through the twenties. Oxford: Oxford University Press.
Bandura, A. (1986). Social foundations of thought and action: A social cognitive theory. Englewood Cliffs: Prentice Hall.
Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51, 1173–1182.
Bryant, S. M., Stone, D. N., & Wier, B. (2006). Financial attitudes: Implications for personal financial planning Services (PFPSs) and financial literacy. Retrieved from http://ssrn.com.ezproxy.library.wisc.edu/abstract=896101.
Coleman, R. P. (1983). The continuing significance of social class to marketing. Journal of Consumer Research, 10, 265–280.
Collis, W. A., & Laursen, B. (2004). Parent-adolescent relationships and influences. In R. M. Lerner & L. Steinberg (Eds.), Handbook of adolescent psychology (pp. 331–361). Hoboken: Wiley.
Danes, S., & Dunrud, T. (1993). Children and money: Teaching children money habits for life (Publication No. HE-FO 6116). Minnesota Extension: University of Minnesota.
Danes, S. M., & Rettings, K. D. (1993). The role of perception in the intention to change the family financial situation. Journal of Family and Economic Issues, 14, 365–389.
De Goede, I. H. A., Branje, S. J. T., & Meeus, W. H. J. (2009). Developmental changes in adolescents’ perceptions of relationships with their parents. Journal of Youth and Adolescence, 28, 75–88.
Erskine, M., Kier, C., Leung, A., & Sproule, R. (2006). Peer crowds, work experience, and financial saving behaviour of young Canadians. Journal of Economic Psychology, 27, 262–284.
Evans, K. (2007). Concepts of bounded agency in education, work and the personal lives of young adults. International Journal of Psychology, 42, 85–93.
Furstenberg, F. F., Jr., Rumbaut, R. G., & Settersten, R. A., Jr. (2005). On the frontier of adulthood: Emerging themes and new directions. In R. A. Settersten Jr., F. F. Furstenberg Jr., & R. G. Rumbaut (Eds.), On the frontier of adulthood: Theory, research, and public policy (pp. 3–25). Chicago: University of Chicago Press.
Fussell, E., & Furstenberg, F. F. (2005). The transition to adulthood during the twentieth century. In R. A. Settersten Jr., F. F. Furstenberg Jr., & R. G. Rumbaut (Eds.), On the frontier of adulthood: Theory, research, and public policy (pp. 29–75). Chicago: University of Chicago Press.
Greenberger, E., & Steinberg, L. D. (1986). The workplace as a context for the socialization of youth. Journal of Youth & Adolescence, 13, 21–43.
Hendry, L. B., & Kloep, M. (2007). Conceptualizing emerging adulthood: Inspecting the emperor’s new clothes? Child Development Perspectives, 1, 74–79.
Hess, R. D., & Torney, J. V. (1967). The development of political attitudes in children. Chicago: Aldine.
Hilgert, M. A., Hogarth, J. M., & Beverly, S. G. (2003). Household financial management: The connection between knowledge and behavior. Federal Reserve Bulletin, July, 30, 9–322.
Kotter, J. P. (2003). The power of feelings. Leader to Leader, 27, 25–31.
Little, T. D., Lindenberger, U., & Nesselroade, J. R. (1999). On selecting indicators for multivariate measurement and modeling with latent variables: When “good” indicators are bad and “bad” indicators are good. Psychological Methods, 4, 192–211.
Lyons, A. C., Rachlis, M., & Scherpf, E. (2007). What’s in a score? Differences in consumers’ credit knowledge using OLS and quantile regressions. The Journal of Consumer Affairs, 41, 223–249.
MacKinnon, D. P., Lockwood, C. M., Hoffman, J. M., West, S. G., & Sheets, V. (2002). A comparison of methods to test mediation and other intervening variable effects. Psychological Methods, 7, 83–104.
Mandell, L. (2008). Financial literacy of high school students. In J. J. Xiao (Ed.), Handbook of consumer finance research (pp. 163–184). New York: Springer.
Mandell, L. (2009). The impact of financial education in high school and college on financial literacy and subsequent financial decision making. Paper presented at the American Economic Association meetings, San Francisco, CA.
Mortimer, J. T. (2003). Working and growing up in America. Cambridge: Harvard University Press.
Moschis, G. P. (1987). Consumer socialization: A life-cycle perspective. Massachusetts: Lexington Books.
Moschis, G. P., & Churchill, G. A. (1978). Consumer socialization: A theoretical and empirical analysis. Journal of Marketing Research, 15, 599–609.
Picard, D. E., & Fullmer, H. (1999). Learning curve: With the help of some planners, teens are getting a head start on their financial futures. Financial Planning, 2, 110–113.
Scanlon, L., Rowling, L., & Weber, Z. (2007). You don’t have like an identity… You are just lost in a crowd: Forming a student identity in the first-year transition to university. Journal of Youth Studies, 10, 223–241.
Schoeni, R. F., & Ross, K. E. (2005). Material assistance from families during the transition to adulthood. In R. A. Settersten Jr., F. F. Furstenberg Jr., & R. G. Rumbaut (Eds.), On the frontier of adulthood: Theory, research, and public policy (pp. 396–416). Chicago: University of Chicago Press.
Shanahan, M. J. (2000). Pathways to adulthood in changing societies: Variability and mechanisms in life course perspective. Annual Review of Sociology, 26, 667–692.
Shanahan, M. J., Porfeli, E. J., Mortimer, J. T., & Erickson, L. D. (2005). Subjective age identity and the transition to adulthood: When do adolescents become adults? In R. A. Settersten Jr., F. F. Furstenberg Jr., & R. G. Rumbaut (Eds.), On the frontier of adulthood: Theory, research, and public policy (pp. 225–255). Chicago: University of Chicago Press.
Shim, S., Xiao, J. J., Barber, B. L., & Lyons, A. (2009). Pathways to life success: A conceptual model of financial well-being for young adults. Journal of Applied Developmental Psychology (online).
Shulman, S., Feldman, B., Blatt, S. J., Cohen, O., & Mahler, A. (2005). Emerging adulthood: Age-related tasks and underlying self processes. Journal of Adolescent Research, 20, 577–603.
Soroukou, C. F., & Weissbrod, C. S. (2005). Men and women’s attachment and contact patterns with parents during the first year of college. Journal of Youth and Adolescence, 34, 221–228.
Thompson, S. C. (1981). Will it hurt less if I can control it? A complex answer to a simple question. Psychological Bulletin, 90, 89–101.
Tinto, V. (1988). Stages of student departure: Reflections on the longitudinal character of student leaving. Journal of Higher Education, 59, 438–455.
Webley, P., & Nyhus, E. K. (2006). Parents’ influence on children’s future orientation and saving. Journal of Economic Psychology, 27, 140–164.
Wintre, M. G., & Yaffe, M. (2000). First-year students’ adjustment to university life as a function of relationships with parents. Journal of Adolescent Research, 15, 9–37.
Xiao, J. J., Tang, C., & Shim, S. (2008). Acting for happiness: Financial behavior and life satisfaction of college students. Social Indicators Research,. doi:10.1007/s11205-008-9288-6. Published Online First: 9 July 2008.
Zimmer-Gembeck, M. J., & Mortimer, J. T. (2006). Adolescent work, vocational development, and education. Review of Educational Research, 76, 537–566.
Acknowledgments
This study has been made possible through a generous support from the National Endowment for Financial Education® (NEFE). The authors would like to thank NEFE® for their dedication to research, education and outreach in promoting financial literacy. We also wish to thank student respondents who participated in the APLUS study.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Shim, S., Barber, B.L., Card, N.A. et al. Financial Socialization of First-year College Students: The Roles of Parents, Work, and Education. J Youth Adolescence 39, 1457–1470 (2010). https://doi.org/10.1007/s10964-009-9432-x
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10964-009-9432-x