How income and financial behaviors shape emerging adulthood experiences? Findings from a brief longitudinal study

Abstract

Emerging adults consider attainment of financial self-sufficiency as a central marker of becoming an adult (Arnett, 2001). However, most emerging adults reach financial self-sufficiency gradually, relying on partial financial support from parents for a prolonged period of time. Living on a limited budget and striving towards financial independence, requires sufficient skills in managing personal finances (Serido, Shim, & Tang, 2013). Considering the previous, it can be expected that financial capabilities shape experiences of this period and the process of becoming an adult. However, today very little empirical evidence exist documenting such effects. The primary goal of this study is to investigate how income, spending behaviors, and subjective financial well- being shape perceptions of EA. This study will present the findings from a recently launched longitudinal with Lithuanian first-year students, studying in tertiary institutions. In total, 533 emerging adults were surveyed during the initial assessment (56.8% women; Mage = 18.92, SDage = 0.72; 21.6% employed; 49.0% living with parents) studying in four institutions. Findings based on three assessments will be presented during the conference. Subjective financial well-being was assessed using a scale developed by Sorgente (2017) and a financial anxiety scale (Shapiro, Gilla, & Burchell, 2012). Spending self-control (Haws et al., 2012) and impulsive buying (Rook & Fisher, 1995) were assessed to target financial behaviors. The short version (Crocetti et al., 2015) of the Inventory of Dimensions of Emerging Adulthood (Reifman et al., 2007) was used to assess perceptions of emerging adulthood. The preliminary findings, based on first wave data analyses, suggest that income is positively associated with self-focus and perceived possibilities, although the associations are rather small. Instead, stronger associations emerge between spending behaviors and subjective financial situation. Specifically, both spending self-control and impulsive buying are positively associated with all five EA dimensions. Subjective financial well-being is negatively associated with instability and positively with perceived possibilities, while financial anxiety in positively associated with identity explorations, instability and feeling in- between. Taken together, results suggest that an ability to effectively control one’s spending and subjective experiences of a personal financial situation might shape experiences of emerging adulthood more than the actual income.