Financial Wellness in Transitions: The Role of Parental Socialization and Self-Efficacy on Stress Among Young Adults

The transition to adulthood is a complex period involving many aspects of life (Settersten, 2010). These normative developmental changes combined with recent increases in costs of living and college (Jennifer Ma & Matea Pender, 2022) make the transition to adulthood particularly important developmentally, we consider the distressing and financial components of the transition. To effectively intervene in young adults’ stress, it is important to understand the promoting factors of financial well-being and mitigate the risks of financial stress (She et al., 2023). These factors can be both intrinsic, like self-efficacy, or external, like socialization. Self-efficacy is the effort and persistence involving the belief in one’s ability (Bandura, 1977). Financial self-efficacy refers to an individual’s confidence in managing finances (Lown, 2012). Socialization is the learned behaviors and concepts acquired through interactions with others (Child, 1954). Parental socialization shapes the ideas and behaviors of young adults through teaching, modeling, and their relationships with their parents (Kim & Chatterjee, 2013). This study investigates the relations between young adult college students’ reports of financial self-efficacy, financial socialization, and overall perceptions of stress. Kennesaw State University students (n = 164) participated in an online survey. Using multiple regression analysis, the influence of financial self-efficacy and financial socialization on perceived stress, and the interaction between financial self-efficacy and socialization. Preliminary results demonstrate a negative association between self-efficacy and perceived stress (r = -.275, p \u3c.001) and between parental socialization and perceived stress (r = -.256, p = .001). These results can help better understand the extent of the role financial self-efficacy and financial socialization play on overall stress. This understanding of the individual and contextual financial influences of stress can help young adults, their parents, and financial advisors navigate their financial relationships and help assist individuals in an already tumultuous transition period