The goal of this study was to consider the role of parents in the development of their children's financial independence by the time the children are old enough to enter college. Using data from 2,098 first-year university students, we examined two pathways to emerging adults' financial, psychological, and personal well-being, combining research on the positive effects of family financial environment and future-oriented coping behaviors. Two findings are of particular note. The quality of parent-child communication regarding financial topics proved to be the most potent predictor of children's financial, psychological, and personal well-being. Further, parents' expectations had a significant indirect influence (via financial coping behaviors) on their children's well-being. Implications for promoting financial self-sufficiency among young adults are discussed.
Key Words: adolescent development, family stress and coping, financial coping, financial parenting, parent-child relations.
Financial strain is a significant source of stress for college students (Staats, Cosmar, & Kaffenberger, 2007). Over time, it raises the risks of depression and other mental health problems (Eisenberg et al., 200 1 ) and lowers the likelihood of graduating from college (KAm, 2007). In contrast, responsible financial behaviors are associated with both greater financial satisfaction and well-being (Xiao, Tang, & Shim, 2008). For these reasons, it is important to understand how young adults acquire the financial behaviors to manage their financial obligations. In this study, we developed and tested a model of financial parenting, as perceived by college students, on financial coping behaviors and the associations of both perceived financial parenting and financial coping behaviors on young adults' psychological, financial, and subjective well-being. Although developmental studies have examined the association of parenting factors on college students' psychological health (Agliata & Renk, 2008) and overall well-being (Holahan, Valentiner, & Moos, 1994), the financial domain has been historically neglected. We contend that the financial coping behaviors practiced in college are the basis of the financial habits practiced in adulthood (Olshavsky & Granbois, 1979) and may contribute to our understanding of the longer-term association between financial behaviors and well-being in adulthood.
The role of parents as socializing agents in their children's development has been well studied (Bornstein, 2002). Although parental socialization declines as an adolescent becomes older (De Goede, Branje, & Meeus, 2009), parents as agents of financial socialization may be particularly salient during the transition to college as children pay their own bills and make independent consumer purchases. At least one study found that among financial socializing agents (parents, peer, media, and school) of college students, only parents' communication was negatively associated with outstanding credit-card balance (Pinto, Parente, & Mansfield, 2005).
The current study investigated ways in which college students' perceptions of financial parenting (e.g., parental financial communication, parental financial expectations, and parental social status) were associated with students' financial, psychological, and subjective wellbeing. From the perspective of the emerging adult child, we examined the association of interactions with parents as subjective factors that promote or inhibit young adults' behaviors (Olson, 1977). In this sense, we contend that young adults' perceptions of financial parenting serve as a basis for the development of their own financial behaviors (Paulson & Sputa, 1996). To provide a sufficient basis upon which to conduct our study, we surveyed developmental research concerning parenting practices on adolescent and emerging adult behaviors and integrated these findings with aspects of consumer socialization. …