The financial identity, financial behavior, and financial socialization: critical issue during emerging adulthood

Abstract

Financial self-sufficiency is an essential aspect of subjective adulthood, and as such, identity development within the financial domain among emerging adults should be better understood. ECP 2019 Abstracts Symposiums and Panel Discussions 112 Barber, Card, Serido, & Shim (2011) developed the Financial Identity Scale (FIS) in order to measure the identity statuses (diffusion, moratorium, achievement, foreclosure) proposed by Marcia (1966). The current paper aims to validate and compare the FIS via various types of validity (score structure, generalizability, criterion-related, known group, and reliability evidence) among emerging adults across three countries (US, Italy, and Lithuania). US data were drawn from Arizona Pathways to Life Success, a longitudinal study launched in 2008 among 2098 first-year college students. Italian data were collected from 440 emerging adults (aged 18-25), while Lithuanian data were collected from 481 emerging adults (aged 18-25). Different Structural Equation Models were run in order to collect validity evidence. Score structure test confirmed the 4-factor structure across the three countries (despite the fact that the Italian version had a bifactorial item (item 8 “I’ve never really questioned my views about saving and spending; if it’s right for my parents, it must be right for me”) loaded on both diffusion and foreclosure factors. Generalizability testing showed that all factors (except for diffusion in Italy) had comparable meaning (i.e., invariant factor loadings) across the three countries. Both criterion-related evidence and known group evidence were demonstrated through significant relations of the FIS factors with the “Life Satisfaction” factor and also with socio-demographic variables (gender, age, living arrangement, occupation, and relational status), respectively. Reliability evidence was revealed by estimating the composite reliability of each factor within each country. Results showed that all factors were highly reliable (ω>.60). Furthermore, reliability evidence was found through testing the FIS’ stability over time through the US longitudinal dataset. More specifically, the scale showed full measurement invariance over time: factorial structure, factor loading, intercepts, and residual variance were equivalent across four waves. Findings confirm that the financial domain is relevant for emerging adults’ life satisfaction and that the Financial Identity Scale is valid in examining identity development within the financial domain during emerging adulthood across different cultures.